When BAT Looks Cheap at a Negative Kimchi Premium: Common Mistakes

If a kimchi premium in the −1% range shows up next to Basic Attention Token (BAT), does that mean it is cheaper than abroad? Judging by the price alone it looks that way, but it is hard to conclude that it is cheap from that one number.

BAT is the reward coin used in the Brave browser

A browser is an app that opens websites. Brave is a browser that blocks ads, but people who want to can choose to see ads and receive BAT as a reward in return. BAT's basic structure is that of a token used among advertisers, users and website operators.

The reward method and payout conditions can change by region and over time, so to know whether you can actually use it, the information screen inside the Brave app is the accurate place to check.

Scene 1. When you see a negative premium and immediately think it is cheap

The kimchi premium is a number showing how much more expensive the Korean price is than the overseas price converted into won. The formula is (Korean price ÷ (overseas price × KRW/USD exchange rate) − 1) × 100. When it is negative, Korea is cheaper, and this is called a reverse premium.

In CoinGaja data as of 2 p.m. KST on October 11, BAT was at −1.26% and Bitcoin at +1.45%. That puts BAT about 2.7 percentage points below Bitcoin. These numbers keep changing, though.

This gap may be a sign that BAT is cheap, but it may also be a sign that few people in Korea want to buy it. The number alone makes it hard to tell the two apart.

Scene 2. When you buy in without checking trading volume

Trading volume is the amount actually bought and sold over a given period. When volume is low, the orders in the order book (the screen where buy and sell orders are stacked up by price) are thin, so a market buy order gets filled by sweeping up through the higher, more expensive asks. The difference between the price you expected and the actual fill price is called slippage.

For example, if you buy ₩1 million worth of a ₩1,000 coin with a market order and it fills at an average price of ₩1,015, you have paid 1.5% more than the price you first saw. That is more than the advantage of a −1% premium. So for large amounts, it is better to check recent trading value and the spacing between quotes, and to split your purchase into limit orders.

Scene 3. When you buy and hold without knowing that deposits and withdrawals are blocked

The deposit and withdrawal status is the indicator on the coin's detail screen or the deposit and withdrawal screen of the exchange app that shows whether deposits and withdrawals are possible. Deposit and withdrawal restrictions are one of the reasons a negative kimchi premium lasts a long time.

Trades that move coins between overseas and Korean exchanges to narrow the price gap become difficult, so prices can stay apart. In that state, even if the coin looks cheap, it can only move within that exchange, and you cannot withdraw it to sell it when you want. If it has only been paused for maintenance or a wallet problem, also watch for when the resumption notice comes out.

Scene 4. When the numbers differ by exchange but you look at only one

Even for the same coin, the kimchi premium differs slightly from site to site. Some sites use the won price of Tether (USDT) as the basis instead of the exchange rate, and the overseas exchanges they compare with differ too.

Whether the premium has stayed negative for several days tells you more than a −1% at a single moment. You can check BAT's kimchi premium at https://coingaja.com/en/premium/BAT.

If you keep just one rule

It is safer to read a negative kimchi premium not as proof that a coin is cheap but as a signal to start checking. Only after you have checked that trading volume is sufficient and deposits and withdrawals are open does that price gap mean something.