In the wake of bitcoin's new highs, South Korea's 'kimchi premium' is in the spotlight again

You may have heard of the "Korea discount" in South Korea's stock markets. Now, get ready for the "kimchi premium," named after the popular side dish of fermented vegetables that's a staple in Korean cuisine.

The "kimchi premium" refers to the price gap in cryptocurrencies, especially bitcoin, when listed in South Korea versus those listed in U.S. or European exchanges.

While this could be seen as an arbitrage opportunity for some, it's not so easy to make a quick buck.

The kimchi premium is in the spotlight again after bitcoin reached all-time highs in mid-March, soaring past $73,000 to a record high on March 13, according to Coin Metrics data. The digital currency has since fallen below the $70,000 level.

As bitcoin tested new highs, the kimchi premium also soared. According to cryptocurrency data provider Cryptoquant, the Korea Premium Index reached its highest level since May 2021 on March 16, reaching 10.88%.

That means bitcoin's trading price in South Korea was roughly 10% higher than the global spot price.

Back in 2017, FTX founder Sam Bankman-Fried saw an arbitrage opportunity in the price gap across different exchanges. The CEO of failed crypto exchange FTX was last week convicted for crypto fraud and sentenced to 25 years in jail.

As a quant trader in 2017, he noticed the price discrepancy of bitcoin could sometimes be as much as 60%. The arbitrage opportunity was especially compelling in South Korea, where prices there were significantly higher than in other countries.

He went on to launch his proprietary trading firm Alameda Research to start trading the digital currency full time, raking in a million dollars a day in some cases.

In 2022, the then 30-year-old billionaire told CNBC he was drawn to the industry because