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Bitcoin: APAC Returns Top US, EU Returns

May 20, 2024

The crypto market has been volatile over the past few weeks, however, the weekends have arguably been quite humdrum. While the US market continue to call shots and dictate asset prices over the short run, it is interesting to note that Bitcoin has been fetching its highest returns during the Asia Pacific [APAC] trading hours [8:00 AM to 6:00 PM Seoul time] on the three-month timeframe.

As illustrated below, investors have been bestowed with 14% returns during the APAC session, while the number stands at 6.05% for the EU [8:00 AM to 6:00 PM Brussels time] and 5.33% for the US [8:00 AM to 6:00 PM New York time]. In fact, the cumulative returns have stayed above 0% during the APAC hours since March, while some hiccups were registered during April-May in the EU and US sessions.

Source: Velo Data

The South Korea Tangent

The South Korean market has always played a pivotal role in solidifying the bias during the Eastern/APAC trading hours. The Kimchi Premium Index started off on a strong note this year, and peaked around 10.88 in mid-March when Bitcoin’s price attained its ATH.  For context, this index gauges the price gap between South Korean exchanges and other exchanges around the world. A number above zero points towards the presence of buying bias. This typically means, Korean market participants are shelling more than usual funds to acquire Bitcoin. Conversely, when bears are in the driver’s seat, Bitcoin trades at a discount on the index.

The reading of the index has slipped down to 2.64 already, but as illustrated below, it currently stands at an above average position, indicating that Koreans are still buying BTC at a premium.  

Kimchi Premium Index | Source: CryptoQuant

The Korea Financial Intelligence Unit [KOFIU] recently released its semi-annual report chalking out the rise in the number of active crypto users in the country. Reportedly, the number bumped by 390k to 6.45 million as of the end of last year. The daily average crypto trading volume grew 24% to $2.6 billion, while the total value of the crypto held by registered exchanges notched up 53% to $32 billion.

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Won vs. Dollar

In fact, another recent parallel report by Kaiko revealed that the South Korean won surpassed the US dollar to become the most traded crypto-fiat pair in the first quarter this year. The report noted,

“The improving macroeconomic environment  and fierce competition among Korean exchanges has boosted trade volume on Korean markets which hit its highest level in more than two years in early March. In Q1 2024, the South Korean Won (KRW) surpassed the US Dollar (USD) in terms of cumulative trade volume.”

Source: Kaiko

The Kimchi reading floating well-above zero and BTC's APAC returns remaining positive point to the refining correlation between the two metrics. As long as the Korean market is characterized by buying pressure, the APAC returns will continue benefitting from it.

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