Kimchi premium is a term used to describe the price difference between cryptocurrency prices on South Korean exchanges and the global market. The term was coined after the popular Korean dish, Kimchi, to describe the price difference as a unique characteristic of the South Korean market.

The Kimchi premium has been known to fluctuate significantly, with some cryptocurrencies trading at a much higher price in South Korea than the global market. This is often due to high demand for cryptocurrencies in South Korea, where they are widely used and accepted, and restrictions on transferring fiat currency abroad. As a result, many investors in South Korea are willing to pay a premium to purchase cryptocurrencies.

However, the Kimchi premium can also be a cause for concern for regulators, as it may indicate a lack of price stability and potential market manipulation. In the past, the South Korean government has taken steps to address the Kimchi premium, such as implementing stricter regulations and cracking down on illegal activities.

The Kimchi Premium refers to the price difference between cryptocurrencies traded on South Korean exchanges and their prices on international exchanges. This phenomenon occurs when cryptocurrency prices in South Korea are significantly higher, often driven by local demand, regulatory factors, or market inefficiencies.

The premium is named after Korea's popular dish, kimchi, highlighting its regional nature. Factors contributing to the Kimchi Premium include strict capital controls, limited arbitrage opportunities, and the high interest of South Korean investors in cryptocurrencies.

Arbitrage traders aim to profit from this disparity by buying cryptocurrencies on international platforms and selling them in South Korea. However, capital movement restrictions and exchange limitations make such arbitrage challenging. The Kimchi Premium reflects unique market dynamics in cryptocurrency trading.