Bitcoin (BTC) whales in South Korea have been selling heavily across major exchanges throughout the past week. Data shows that multiple $100 million deposits to Bithumb have been spotted in the last three days alone.
By volume, South Korea has a much smaller cryptocurrency exchange market compared to the United States. Yet, South Korea’s cryptocurrency exchanges have seen massive inflows that are comparable with other major markets.
Large inflows into exchanges typically indicate selling pressure from whales because high-net-worth investors do not keep their holdings on exchanges. Hence, when capital flows into a trading platform, it shows an intent to sell.
Return of the “kimchi” premium
After two $100 million deposits to Bithumb were spotted, Korbit saw a $90 million deposit on Jan. 9.
According to CryptoQuant Alerts, 2,098 BTC, worth $84 million, were deposited into Korbit at 11:42 am KST.
Due to the discrepancy between the daily volume of South korean exchanges and major U.S.-based or international exchanges, inflows that exceed $50 million are often considered unusually large deposits.
Data from CoinMarketCap shows that Korbit ranks 21st in the global market by daily volume, processing $44 million worth of trades daily.
Hence, a $84 million deposit on a single day is an abnormally big deposit given that the exchange trades around $44 million a day, per CoinMarketCap.
The most likely reason behind the continuous inflows into South Korean exchanges is arbitrage.
In December 2017, when Bitcoin first surpassed $20,000 in South Korea, the dominant cryptocurrency was trading about 20% higher at times, what became known as the “kimchi premium.”
In recent weeks, Bitcoin has been trading around 5% higher on South Korean exchanges. This might have encouraged whales to arbitrage the premium, driving massive inflows.
However, arbitraging the premium in South Korea is not…