An Investigation into Premium Pricein Korean Bitcoin Market

Bitcoin;Cryptocurrency;Speculation;Premium price;351

행정대학원 글로벌행정전공 ;

University:서울대학교 대학원

关键词: Bitcoin;    Cryptocurrency;    Speculation;    Premium price;    351;   

Others  :  http://s-space.snu.ac.kr/bitstream/10371/161759/1/000000157313.pdf

美国|英语

来源: Seoul National University Open Repository

【 摘 要 】

This study aims to explore a background for a so-called Kimchi premium on Korean Bitcoin market. Korea has garnered considerable attention around the globe because the level of the Bitcoin price was set far higher than in other countries. This paper tries to find a reason for the Korean Bitcoin premium in relation to government policies. Following previous studies that suggest a premium price that one country pays more than other countries reflects a higher speculative demand in the cryptocurrency market, this paper focuses on the environment that allowed higher speculative demand could grow in Korean Bitcoin market. Compared to other countries, Korea is found out to be late in making their first move in cryptocurrency markets. While other major countries such as the US, Japan and China recognized the need for a regulatory system and started to take measures to deal with relevant issues as early as 2013, it was not until 2017 that Korean government issued their first official announcement toward cryptocurrency markets. In other words, Korea had to face a frenzy cryptocurrency craze peaked on December 2017 basically with no regulatory frame. This paper regards that the absence of a regulatory framework in Korea provided a favorable soil for speculative demands to grow. So this paper traces a trend of Bitcoin Kimchi premium, analyzing changes made between ex-ante and ex-post a series of intensive government policies targeting the cryptocurrency market. The fact that Kimchi premium is found out to have vanished after a strong government intervention implies higher speculative demand reflected in high Bitcoin premium was due to a lack of appropriate regulatory framework. The most important contribution of this paper is that it offers a different view toward premium price in cryptocurrency from precedent studies. Previous studies tend to argue that countries with high premiums have a larger incentive to invest in alternative means, such as cryptocurrency because their financial system is poorly functioning. Apart from this dominant view, this paper thinks existence and non-existence of an appropriate regulatory framework are important in the creation and extinction of speculative demands that lead to premium price.