April 25, 2024

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[THE INVESTOR] Korean prices of the world’s largest cryptocurrency Bitcoin appear to be recovering, as investors seemed comforted by recent comments from a high-ranking government official here on endorsing “normal” digital coin transactions.

In late morning trade, the price of Bitcoin rose rose 2 percent from a day earlier to 13.3 million won (US$12,350) after hitting 14 million won around 7 a.m., according to Bithumb, one of the largest cryptocurrency exchanges in the country. It gave up morning gains in the afternoon, falling 2 percent from the previous trading day as of 2:35 p.m. But trading volume was significantly bigger. 

It also compares with the global average of US$11,248.20, (12,070,000 won). This means the so-called “Kimchi Premium” -- referring to the higher prices of cryptocurrencies in Korea compared to other countries -- has widened to 10 percent for the first time in a month. 

On Feb. 20, Choe Heung-sik, governor of the Financial Supervisory Service, told representatives of local cryptocurrency exchanges that the government would “support” normal cryptocurrency transactions.

Choe had earlier said he would bet on the cryptocurrency bubble bursting, so his latest comments appeared to signal a softening of the government stance, according to industry watchers. 

Since late last year, the government announced a series of crackdown measures, including real-name trading system, to curb trading of cryptocurrencies amid growing fears that the market is overheated.

Amid the stringent measures, the price of Bitcoin plummeted to 6 million won in early February from 250 million won in early January. At its peak, the Kimchi Premium reached almost 50 percent. 

By Park Ga-young (gypark@heraldcorp.com)