Reverse Premium
Reverse kimp · Negative kimchi premium
When a coin is cheaper on Korean exchanges than overseas, so the kimchi premium turns negative.
Simple explanation
Background: Because Korean exchanges trade in won and money cannot flow freely between Korea and the rest of the world, Korean prices sometimes sit above global prices and sometimes below them.
The kimchi premium is positive when Korea is more expensive and negative when Korea is cheaper. A negative kimchi premium is called a reverse premium.
It can appear when overseas prices rise first and Korean prices lag behind, when many people are selling in Korea, or when the KRW/USD exchange rate rises and the overseas price becomes worth more in won.
A reverse premium is not automatically a bargain. If deposits or withdrawals of the coin are suspended, or it hardly trades, its Korean price can move on its own. Check the deposit and withdrawal status and the trading value as well.
It is calculated exactly like the kimchi premium; any result below zero is a reverse premium.
Example
Overseas price in won ₩100,000,000
Korean price ₩98,000,000
Kimchi premium = 98,000,000 ÷ 100,000,000 − 1 = -2.00% → reverse premium
※ Example numbers, for illustration only
See it on CoinGaja
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