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In the wake of bitcoin’s new highs, South Korea’s ‘kimchi premium’ is in the spotlight again – CNBC

  • Cryptocurrencies in South Korean exchanges commonly trade at a premium compared to global exchanges, due to a closed market environment.
  • While this may ostensibly present an arbitrage opportunity, experts who spoke to CNBC listed various reasons why this strategy may not be viable.
A bowl of kimchi, a fermented vegetable side dish that is a staple in all Korean meals
Kitzcorner | Getty Images

You may have heard of the “Korea discount” in South Korea’s stock markets. Now, get ready for the “kimchi premium,” named after the popular side dish of fermented vegetables that’s a staple in Korean cuisine.

The “kimchi premium” refers to the price gap in cryptocurrencies, especially bitcoin, when listed in South Korea versus those listed in U.S. or European exchanges.

While this could be seen as an arbitrage opportunity for some, it’s not so easy to make a quick buck.

The kimchi premium is in the spotlight again after bitcoin reached all-time highs in mid-March, soaring past $73,000 to a record high on March 13, according to Coin Metrics data. The digital currency has since fallen below the $70,000 level.

As bitcoin tested new highs, the kimchi premium also soared. According to cryptocurrency data provider Cryptoquant, the Korea Premium Index reached its highest level since May 2021 on March 16, reaching 10.88%.

That means bitcoin’s trading price in South Korea was roughly 10% higher than the global spot price.

Back in 2017, FTX founder Sam Bankman-Fried saw an arbitrage opportunity in the price gap across different exchanges. The CEO of failed crypto exchange FTX was last week convicted for crypto fraud and sentenced to 25 years in jail.

Sam Bankman-Fried sentenced to 25 years for FTX fraud: CNBC Crypto World

As a quant trader in 2017, he noticed the price discrepancy of bitcoin could sometimes be as much as 60%. The arbitrage opportunity was especially compelling in South Korea, where prices there were significantly higher than in other countries.

He went on to launch his proprietary trading firm Alameda Research to start trading the digital currency full time, raking in a million dollars a day in some cases.

In 2022, the then 30-year-old billionaire told CNBC he was drawn to the industry because the wide arbitrage opportunities seemed “too good to be true.”

The ‘premium’

Bitcoin frequently trades at a higher price in South Korea compared to other markets, according to research by the University of Calgary.

While the average kimchi premium was 4.73% between January 2016 and February 2018, it hit levels as high as 54.48% in January 2018, according to the report that was published in 2019.

Why is there a price discrepancy?

It occurs because crypto, unlike stocks or bonds, are decentralized digital assets which use blockchain technology that’s not controlled by a central authority, and can therefore be traded at different prices around the world.

One factor for the price gap is the high demand for cryptocurrencies in South Korea, in what has sometimes been referred to as “a closed market environment.”

What’s next for Bitcoin and the crypto space

To prevent money laundering in crypto trading, the country’s Financial Services Commission has implemented what is known as a “real name” policy, requiring a person’s domestic virtual asset trading account name to match the name on their deposit account with a bank.

Only South Korean nationals or foreigners with resident registration cards are allowed to open full-fledged bank accounts in the country, effectively locking out overseas access to its domestic crypto exchanges.

“South Korea requires a specific type of bank account linked to an individual in order to open a crypto exchange account, which makes it challenging for institutional players to enter the crypto market,” Crypto data platform Chainalysis said in a 2023 report.

Bitcoin prices in South Korea are pushed above those in other global bourses, as demand is driven mainly by retail investors since institutional and foreign investors are not able to participate freely.

Chainalysis added South Korea received a total crypto value of over $111.82 billion from July 2022 to June 2023 — the largest amount in any East Asian countries, surpassing even Japan and China, the region’s largest economies.

The report also noted that South Korea appears to be the least institutionally driven market in East Asia based on transaction sizes.

“That’s likely due to local regulations that make it difficult for financial institutions to trade,” the report said.

Arduous arbitrage

The kimchi premium may appear to be an arbitrage opportunity, but it’s not so straightforward.

In theory, an investor can buy bitcoin on an international exchange at a lower price, transfer the cryptocurrency to a South Korean bitcoin exchange at a higher price, and make a risk-free profit by selling it on the South Korean exchange.

However, the fact that the South Korean won is regulated makes this arbitrage strategy difficult for international investors, explained Baik Seunghoon, country manager for South Korea with crypto mining firm GoMining.

He pointed out that the won is a highly restricted currency, and won transfers outside the country are tightly controlled.

Citing South Korean capital controls, Baik pointed out that so-called “small overseas remittance agencies” are only allowed to remit up to $10,000 per transaction for each individual, up to an accumulated amount of $100,000 for the same person per year.

SEC Chair Gensler: Crypto is a field 'that's been rife with fraud and manipulation'

This means there’s a limit to how much fiat currency can be taken out, which by extension, limits the rate of gains that traders can cash out.

There are also other risks to this arbitrage strategy, according to research by University of Calgary.

First, the transfer of bitcoin from a foreign exchange to a South Korean exchange takes time, and during that time, the price of bitcoin could change.

Checks by CNBC revealed that transfers can take anywhere from one hour to one day for cryptocurrencies to be shifted to an external wallet.

This means that investors run the risk of seeing the kimchi premium become smaller or completely disappear during the time it takes to execute the arbitrage trade.

Paul Brody, global blockchain leader at EY, told CNBC that while the kimchi premium has been around for a while, his view is that it’s harder to conduct the arbitrage trade today than in the past.

“What’s different now is that in many other parts of the world, it is more and more difficult to send money through the blockchain without doing any KYC,” Brody pointed out. He was referring to the know-your-client process, where customers’ identities need to be verified by financial institutions so as to mitigate financial crime.

Furthermore, he said exchanges that are compliant with regulations will limit an investor’s ability to send money overseas unless an investor has the necessary documentation and regulatory support.

In short, the reality is that time, fees and capital controls can introduce complications, making capitalizing on this strategy either less attractive or outright unviable.

— CNBC’s MacKenzie Sigalos and Kate Rooney contributed to this report.

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Public Health Specialist: Prevention, Care & Treatment (Harare) at U.S. Embassy In Zimbabwe – Pindula Jobs – pindula.co.zw

JOB KNOWLEDGE:

Comprehensive knowledge of current HIV/AIDS Prevention Care &Treatment (PC&T) issues including prevention strategies, behavior change, HIV testing, and treatment is required. In-depth knowledge of the range of PC&T programs, policies, regulations and precedents applicable to development and administration of national public health program is required. Detailed knowledge of the host government health care system and structures including familiarity with MOHCC policies, program priorities and regulations is required. In-depth knowledge of HIV/AIDS public health programs, strategies, methods, processes and techniques used to plan, develop, implement and evaluate results of prevention, care and treatment programs is required. Good working knowledge of overall administrative requirements, budgeting and fiscal management in support of contracts/cooperative agreements/grants/purchase requisitions is required.

Education Requirements:

Doctoral level degree (Doctor of Public Health (D.Ph.), Doctor of Medicine (MD) or Doctor of Philosophy (PhD) or host country equivalent degree in medicine, nursing, public health, epidemiology, behavioral science field is required.

Evaluations:

LANGUAGE: English: Level 4 – Fluent; speaking/reading/writing, may include the ability to translate

SKILLS AND ABILITIES:

Strong oral and written communications skills are required to develop and maintain effective, sustainable working relationships with national and international working partners and generate dissemination. Ability to analyze, understand and discuss program design, management and implementation approaches is required. This includes the development of evaluation designs, use of reliable and valid instruments and methods for data collection, and conducting data analysis. Ability to work across a wide range of complex situations and settings and to develop cooperative, collaborative and effective program strategies with diverse partners and stakeholder organizations. The specialist is expected to be innovative and have strong problem-solving skills to overcome challenges such as stakeholders’ resistance to accept new guidelines or program shifts, program implementation problems, resolving differences in approach between host government policies/priorities and PEPFAR priorities, and redirecting partner practices to conform to standards for HIV/AIDS prevention, treatment, and care. Intermediate user level of word processing, spreadsheets, and databases is required. Strong skills in data analysis, including interpretation of program monitoring and evaluation data and translating research findings into practice, are required. The ability to lead results-driven project teams and workgroups is required.

EQUAL EMPLOYMENT OPPORTUNITY (EEO): The U.S. Mission provides equal opportunity and fair and equitable treatment in employment to all people without regard to race, color, religion, sex, national origin, age, disability, political affiliation, marital status, or sexual orientation.

All applicants under consideration will be required to pass medical and security certifications.

Other

How to Apply

Click here to apply

Deadline: 25 April 2024

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Driver (Kariba) at Family AIDS Caring Trust (FACT) – Pindula Jobs – pindula.co.zw

Job Description

Family AIDS Caring Trust Zimbabwe (FACT) is a Christian based organisation that was instituted in 1987. Since establishment, FACT Zimbabwe has been a leading national HIV and development organisation implementing various projects directly and through partnerships. The organization’s programming focuses on 4 strategic pillars Safeguarding and Sustainable Livelihoods (SSL), Health and Well-being (HW), Strategic Information and Research (SIR) and Organisational Efficiency and Effectiveness (OEE). FACT seeks the services of a Driver detailed below.

Reports to: Procurement and Logistics Assistant.

Duties and Responsibilities

  • Maintains vehicle log books and photocopies the current log sheet and fuel ledger and submits to the Senior Driver.
  • Checks to see if vehicles are due for service and takes vehicles for servicing and repairs.
  • Keeps vehicles clean all the time.
  • Initiates fuel procurement requests.
  • Supports teams on outreach activities.
  • Drives project staff to their project implementation areas.
  • Collects all commodities (fuel, stationery, furniture etc) procured for the office.
  • Reports incidents and breakdowns on the vehicles.
  • Checks to ensure all vehicles have fuel, oil, water, and other fluids.
  • Checks to ensure that all vehicles are licensed and insured by liaising with the Senior Driver.

Qualifications and Experience

  • Should have 5 O levels.
  • Driver’s licence should be at least 5 years.
  • At least 2 years accident-free driving as a professional driver.
  • Class 4 drivers’ licence, defensive driving certificate,

Other

How to Apply

Click here and complete the form.

Send a detailed CV to: hr@fact.org.zw, highlighting the post.

Please ensure that both steps are carried out to complete the application process.

  • Background checks will be done for successful candidate to ensure child safeguarding and protection in all our work. FACT commits itself to protecting children whom its staff, volunteers as well as outsiders may get into contact with. The organization is mandated to serve the best interest of all children through protection from abuse, harm and exclusion, child participation and development in all its programs.
  • FACT is an equal opportunity employer which does not discriminate in terms of race, tribe, place of origin, political opinion, colour, creed, gender, pregnancy, HIV/AIDS status or, subject to the Disabled Persons Act [Chapter 17:01].

FACT does not charge a fee at any stage of the recruitment process.

NB: Only short listed candidates will be notified.

Deadline: 19 April 2024

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Heaviest black hole pair ever discovered – Sky at Night Magazine

A pair of supermassive black holes that have been trapped dancing around each other for billions of years have now been found to be the heaviest binary ever measured.

Though theory predicts that such pairs of supermassive black holes should merge together, the act of merging has never actually been seen.

The huge mass of this pair could help astronomers understand why such mergers are seemingly so rare.

The pair are located in B2 0402 379, an enormous ‘fossil cluster’ galaxy created when an entire cluster’s worth of galaxies and stars merged into a single giant elliptical.

The Final Parsec Problem concerns the merging of supermassive black holes in colliding galaxies. Credit: Draco-Zlat / Getty Images
Artist’s impression of merging black holes in colliding galaxies. Credit: Draco-Zlat / Getty Images

Most galaxies host a central supermassive black hole.

When galaxies merge, these begin orbiting around one another.

As they circle, they transfer some of their energy to the surrounding stars and gas – much of which is ejected in the process.

The more energy these black holes lose to the material around them, the closer they move towards each other. 

In the case of this binary pair, the black holes moved in until they were a mere 24 lightyears apart – the smallest such separation ever directly measured.

However, they have remained stuck at this distance for the last three billion years.

To understand why this might be the case, astronomers have used the Gemini North telescope’s Gemini Multi-Object Spectrograph (GMOS) to study the system.

The Gemini North telescope. Credit: International Gemini Observatory/NOIRLab/NSF/AURA/T. Slovinský
The Gemini North telescope. Credit: International Gemini Observatory/NOIRLab/NSF/AURA/T. Slovinský

“The excellent sensitivity of GMOS allowed us to map the stars’ increasing velocities as one looks closer to the galaxy’s centre,” says Roger Romani from Stanford University, who took part in the study.

“With that, we were able to infer the total mass of the black holes residing there.”

The binary is estimated to weigh in at 28 billion times that of the Sun, making it the heaviest ever measured.

As well as giving vital context to the formation of this specific binary system and its past within the galaxy, the measurement also gives support to the idea that the stalling of binary supermassive black holes is linked to their huge masses.

The amount of gas and stars that would have to be ejected in order to move such massive black holes this close to each other would be enormous. 

“Normally it seems that galaxies with lighter black hole pairs have enough stars and mass to drive the two together quickly,” says Romani.

“Since this pair is so heavy, it required lots of stars and gas to get the job done. But the binary has scoured the central galaxy of such matter, leaving it stalled.”

www.noirlab.edu

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