“Sushi premium” pushes Bitcoin to new records in Japan

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Last Updated on 28 April 2024 by CryptoTips.eu

The low rate of the Japanese yen means that young Japanese people are increasingly investing large amounts in Bitcoin, whose price is quoted in dollars. For example, Bitcoin climbed 42% higher this year for Americans, and no less than 60% higher for Japanese. After the ‘kimchi premium’ from 2015 and 2016, we now see the ‘sushi premium’ in Tokyo. Let us explain.

The man who discovered the ‘kimchi premium’ (named after the fermented vegetable dish which is highly popular in South Korea) in Bitcoin was none other than Sam Bankman-Fried, the CEO of FTX, the major crypto platform that went bankrupt in 2022.

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Jane Street

Back in 2016 Sam worked as a trader at a trading company called Jane Street. He had discovered that there was much more interest in crypto coins among young people in South Korea and Tokyo than among Americans. Because of this disparity, the price of Bitcoin in Seoul was in some cases 10% higher than the price of Bitcoin in New York, for example.

Together with some friends, Sam flew from New York to Seoul, bought $1,000,000 worth of Bitcoin and sold it when he got home. This trade, called arbitrage, has never been as successful as in 2015-2016 in Seoul and Tokyo. Sam earned millions.

After Bitcoin set a new price record of $73,000 this year, the ‘Kimchi premium’ also returned. Because crypto trading is now much larger than back then, the premium is of course much smaller as more global companies are involved, but sometimes differences of 3 to 4% per day can still be noticed. For anyone able to trade several million dollars per day between regions, this is of course an interesting fact.

Where it is much higher this year, however, is in Tokyo. This is because the Japanese Central Bank still refuses to raise interest rates, just as the Federal Reserve and the European Central Bank have been doing for several years already. As a result, the Japanese Yen is visibly falling against the US dollar and more and more young Japanese are buying Bitcoin in order not to see their savings devaluate. Bitcoin is now called the ‘sushi premium’ in Tokyo.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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