Bitcoin study claims that Chinese crypto dealers make Korean buyers, but they are not (opinion)

Bitcoin study claims that Chinese crypto dealers make Korean buyers, but they are not (opinion)

There is recently a crypto study from South Korea about Chinese Bitcoin Arbitrage dealer and Korea's "Kimchi premium" on Bitcoin prices. His characterization of cross-border Bitcoin trade and its recommendations let some important economic foundations miss.

A recently published crypto study by Incheon National University and the Bank of Korea is circulating. The authors found a strong correlation between the "Kimchi bonus" and international transfers to China.

"Kimchi Premium" is the continued higher Bitcoin price in South Korea

The Kimchi premium are the higher Bitcoin and crypto prices in South Korea. This is due to the higher relative demand for Bitcoin within the Korean economy compared to Fiat payments. It is also a result of the lower BTC offer.

The authors of the paper conclude that Chinese arbitrage dealers Bitcoin sell to South Koreans. They suggest that the Chinese Bitcoin sellers are after the Kimchi premium. They sell it especially to South Korean crypto dealers to achieve a higher price.

The authors of the paper represent this so that Chinese crypto dealers use Korean crypto dealers. They call South Korea a "goal" and say that Chinese crypto dealers "take advantage of excess demand". In addition, you also call for international regulatory standards for cryptocurrencies to protect investors.

But Chinese crypto dealers are not South Korean crypto dealers. The South Korean Bitcoin buyers don't mind being dripped when it is. You are ready to pay higher prices to get more Bitcoin.

Chinese serve the higher demand

The study comes from the economic department of Incheon National. But the paper itself is not very economical. The author does not seem to be economically considered the cross -border trade in Bitcoin.

Higher prices specifically exist to attract more sellers. This is how markets work to coordinate supply and demand. There is not as much Bitcoin in South Korea as people would like on the market.

You are ready to pay a higher price to get more Bitcoin. This is a free market. It is not a exploitation. In this way, the prices distribute the resources where people they want the most, in the fair compromises that we all enter.

The Chinese dealers who receive the Kimchi premium react to an incentive. Bitcoin buyers in Korea increase this incentive with their own money. They use the higher price that you are willing to pay than BTC bait.

A reduction in state controls on the financial markets could be more suitable to reduce the premium. The trade relationship between Chinese and Korean crypto dealers, which is advantageous for both sides, is not a exploitation. It is economy.

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