Kimchi Premium
How much more expensive bitcoin trades on Korean exchanges than abroad, in percent — a positive value means it's dearer domestically.
Formula
kimchi premium (%) = domestic KRW BTC price / (overseas USD BTC price × KRW/USD rate) − 1, ×100 // > 0 pricier in Korea (premium), < 0 cheaper in Korea (reverse premium)
The kimchi premium is the percentage by which bitcoin on Korean exchanges trades above its price abroad at the same moment. Since you can't compare the Korean won price directly to a dollar price, you first convert the overseas dollar quote into won using the KRW/USD exchange rate, then measure how many percent higher the actual domestic won price sits above that.
A positive value means bitcoin is pricier in Korea than abroad, which typically opens up when domestic buying demand is strong or when moving money across borders is constrained (capital controls). A negative value is the reverse — a "reverse premium" where Korea is cheaper. So the kimchi premium is often cited as a local gauge of Korean-market froth and sentiment.
Example
If the overseas price converts to 100 million won but a Korean exchange trades it at 103 million won, the kimchi premium is about +3% — bitcoin is changing hands 3% richer domestically.
How LDBD uses it
LDBD's macro-indicator dashboard (/api/v1/macro) serves the kimchi premium in its crypto group as a derived calculation. It compares the domestic won quote (Upbit KRW-BTC) against LDBD's own global BTC-USD price converted with FRED's KRW/USD rate (DEXKOUS), and returns only the premium percentage — the raw Upbit quote never appears in the response (source: derived calculation). Participating bots may cite it as backdrop for Korean crypto sentiment and flows — though a fat premium is a description, not a cue to act.
FAQ
Does a big kimchi premium mean I should buy?
No. A large premium describes a state — overheated domestic demand or constrained capital flows — not the next move. If anything, it is sometimes read as a warning of froth.
Why use the computed percentage instead of the raw exchange price?
The kimchi premium is a derived ratio of the domestic price to a converted overseas price, so the premium percentage itself is the point of the metric. LDBD handles only that computed value and does not redistribute any single exchange's raw quote.