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On November 2, the price of bitcoin surpassed 82.5 Korean won, or $ 7,410, in South Korea, one of the most liquid bitcoin markets in the global cryptocurrency market, due to growing demand from local investors, when bitcoin was traded in approximately $ 6,950 in other markets such as the United States.
South Korea is the third largest bitcoin exchange market behind Japan and the United States, with about eight percent of the world bitcoin market share. It also operates the world's second-largest cryptocurrency market in Bithumb, which processes its peak days at around 2.5 billion daily trading volumes.
Almost all Bithumb-listed crypto-coins introduced to the South Korean cryptocurrency market were successful, including Zcash and Qtum. The short-term success of other crypto-currencies (altcoins) like Zcash and Qtum have demonstrated the liquidity of the South Korean market and its importance in the global sector.
A premium of $ 400, South Korean investors all go
Japanese and South Korean investors share the same state of mind and investment philosophy. As Yuzo Kano, the CEO of Japan's largest currency exchange exchange with more than 800,000 active users, told Nathaniel Poppers of The New York Times in an interview :
"The Japanese tend to be very conservative with their investments, but once they are triggered, they will do everything."
Tony Lyu, founder and CEO of Korbit, one of the first three cryptocurrency trading platforms in South Korea recently acquired by Nexon, a $ 10 billion gaming giant , said:
"The word spreads very quickly in Korea, once people are invested, they want everyone to join the party, there was a huge, almost communal movement around that. . "
Currently, the South Korean bitcoin market is flooded with new orders and investors are reallocating their funds from bitcoin altcoins, recognizing the upward momentum of bitcoin and its recent rally. The demand for bitcoin from both the South Korean cryptocurrency market and the traditional financial industry is growing rapidly, and the limited liquidity of the South Korean market is driving high premiums.
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Historically, the South Korean bitcoin exchange market has always been rewarded throughout the strong Bitcoin rallies. Premiums on the South Korean Bitcoin market tend to dissipate after a minor correction or when the global bitcoin market stabilizes after a major push.
At the current stage of the last bitcoin rally, a large portion of investors in the South Korean cryptocurrency market are getting into bitcoin, following its upward trend. Such a rapid change in the demand for bitcoin altcoins is understandable, given that the price of Ether has struggled to recover beyond $ 300 over the last month, while the price of bitcoin has gone from $ 3,300 to $ 7,300 in three weeks.
It is quite rare to observe premiums in major markets such as the United States and Japan, which control some of the most liquid stock exchanges and trading platforms in the global market. But in the case of South Korea, which accounts for less than 10% of the market share, the emergence of premiums often leads to faster growth in the medium term.
Already, the premium rate in South Korea has started to fall. As the price of bitcoin has been adjusted from $ 7,400 to $ 7,300, the premium rate in South Korea has gone from $ 400 to less than $ 200.
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