Recently traders Bithumb could see an abnormal spike in prices for some scriptactive when tokens such as Ethos, traded six times more expensive compared to the averages only for the South Korean exchanges.
Many began to attribute these incredible prices the so-called Premium Kimchi, which is typical for the local stock market.
The term “Premium Kimchi” is used by experts to describe the price gap between cryptocurrencies for South Korean and foreign exchanges. As the newspaper notes NewsBTC, indices of prices of certain cryptocurrencies here can vary significantly.
However, as noted the Deputy Chairman of the Committee on financial services of South Korea, Kim Jonboy, indicators of “Premium Kimchi” was significantly reduced, as a result of government regulatory policy:
“The government’s actions led to the fact that the concept of “Premium Kimchi” will disappear over time in South Korea. During peak periods it sometimes reached 50%, because of the unusual high demand, and related speculation. As at the moment the price of the cryptocurrency almost identical to prices in other markets, which indicates a stable situation in the South Korean market cryptocurrency”.
Manipulation or market laws in action?
In June Bithumb been compromised, in which an unknown hacker managed to hack the hot wallets of exchanges. Immediately after the break-in was disabled withdrawals and blocked deposits. Freeze of these two key functions, necessary for any exchange, and probably caused a situation, when the shortage of supply did not meet the needs of customers. As shown by the laws of market relations, the impact of supply and demand are fundamental to any market and lack of supply with high demand will only raise prices.
Such scriptactive as Ethos, this trend is particularly strongly affected, and the prices shown on Bithumb was nearly 600% higher than the average cost indicated on CoinmarketCap. Other scriptactive also faced on the stock exchange with a similar situation, although their cost was not so great.
Although this likely was not the result of direct manipulation by individuals interested in speculative growth of cryptocurrencies, the cause of the “Premium Kimchi” can be of interest to the regulator.
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Tags: Bithumb Ethos Kimchi Premium