An abnormal price surge of some cryptos has been experienced by Bithumb traders recently. Tokens such as Ethos traded six times over its average value only on Bithumb. A lot of traders have attributed this absurd price surge to the Kimchi Premium. In fact, local cryptocurrency traders have become accustomed to the Kimchi Premium in the recent months.
Kimchi Premium is a term that is used to describe the gap between cryptocurrency process on South Korean exchanges and foreign exchanges. The Bitcoin values on Korean exchanges were around 30 percent higher than average market prices. However, Vice Chairman of South Korea’s Financial Services Commission, Kim Yongbeom, mentioned in his statement that as a direct outcome of governmental practices, the premium has been reduced.
Bithumb suffered a devastating hack in June. The exchange noticed that the exchange-owned hot wallets were being breached by a hacker. After receiving the news of this hack, the Bithumb team shut down withdrawals and deposits. Deposits and withdrawals remain closed even month after the ~$30 million security breach.
With the shutdown of these two significant features, it has caused a situation where there aren’t enough sellers to match the orders of buyers. Withdrawals and deposits are key features which are essential for the operation of any exchange.
As reported by NewsBTC, the problem has especially hit hard cryptocurrencies like Ethos, with Bithumb posting prices that are almost 600 percent higher than the average cost displayed on CoinMarketCap.
Other cryptos on the exchange have also faced similar issues, as Bithumb users continue to rush to buy the undersupplied cryptocurrencies. CoinMarketCap, a leading cryptocurrency statistics site has removed Bithumb’s pricing statistics from the volume-weighted figures that are displayed on their platform as a result of these absurd price surge figures.
Although this price surge was not the result of direct manipulation by malicious individuals, the Kimchi Premium events may still be of interest to some regulators.
The post Bithumb’s Abnormal Crypto Price Surge Due To Kimchi Premium appeared first on OWLT Market.
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