Why Bithumb Prices Are So Much Higher and Possibly Inaccurately Skewing the Entire Crypto Market


Bithumb is a South Korean Exchange that is trading coins at a dramatically higher rate than any of the other exchanges around the world. At the time of this writing the price of Bitcoin on Bithumb is right around $22,800.00 and Bitstamp Apx $15900.00 for a difference of $6900.00 Higher. Traditionally this would be an arbitrage dream so why is it not happening. For those unfamiliar with Arbitrage it is when traders buy and sell between exchanges to capitalize on the difference in price. The net effect of this generally leaves all exchanges and all prices within only a few percentage points of one another. Of course sending coins around takes time which can lead to greater gaps but NOTHING like what were seeing from Bithumb. From the outside it looks like a huge mystery and there MUST be a reason.

And like any good mystery. There IS a reason. It seems like black and white that a person would be able to buy a Bitcoin on Bitstamp for 15 thousand bucks and send it to Bithumb and sell it for 22 thousand making a tidy profit. The problem is. BIthumb caters to the South Korean market and South Korea has STRICT money transfer laws. Its not too hard to get money sent TO South Korea but good luck ever getting it out. So unless you intend to take a long vacation in South Korea? You best not cash anything out there. The only recourse would be to purchase another coin that you can send out. That is exactly what people are doing. That’s why all the other coin prices are being inflated as well. Of course that’s not the only reason. South Koreans too are purchasing other coins such as BCC, Dash and LTC. No matter who is buying them. The prices are just as inflated as Bitcoin which eliminates effective Arbitrage.

Here’s the rub. Depending on the tools you use to track prices? You could be getting a weighted average between all exchanges. If the average includes Bithumb? They will be sharply higher than the reality on other exchanges. I decided to sit down and write this because after I looked at the prices this morning? I was ready to shut AltcoinToday down and buy a massive yacht and sail into the sunset while drinking margaritas.

Of course the trend for crypto is still very bullish and its not unlikely the prices on Bithumb might be a reality everywhere else sooner than later worldwide.

AltcoinToday is not going anywhere even WHEN they do. Mainly because I get sea sick.

One other thing to note is significantly or routinely higher prices on an exchange? Could be a sign there are problems IN the exchange itself. Anytime there is not a free flow of money both in AND out. Things get out of balance. We saw this most glaringly with MTGox Collapse.

(There was lot more at play than MtGox funding alone that caused BTC to Spike to $1300 in 2014 the following is an example only)

Went something like this. BTC price $400.00. MtGox slowed down the Fiat funding cash outs to banks the price rose to $600.00 because the only way to get money off their exchange was in BTC. Next MtGox stopped Fiat funding altogether which caused a rush on their exchange to get BTC and cash out as quickly as possible. Prices on Gox were sometimes $75 to $150 higher. The prices on other exchanges followed suite as people rushed to send BTC into MtGox to capitalize on their inflated prices. This new flow of BTC allowed Gox to continue to fund BTC withdrawals. Then the news coverage on Bitcoin started which brought MORE dead money to Gox leading to the great spike. Like any ponzi funding old debt with new money? The second the trend reversed? They collapsed.

Again. I am NOT saying Bithumb is in any danger of collapse or Bitcoin is  Ponzi. I am only pointing out that any time there is a imbalance to the flow of money in and out? Prices can become skewed. These skews can lead to other markets being affected.

The coin tracker we use is provided by Cryptocompare and do not include Bithumb. One of the oldest and most popular Market Cap sites is Coinmarketcap.com. They DO include Bithumb. There are several other Market Cap sites. Make sure you look to see if they are including Bithumb before you make your buying or stop loss positions.




    • Hey Thanks! I appreciate that very much.

  1. Sean Yates

    Hey there! Very interesting article, I have a question though, after selling for the arbitrage, if you buy an altcoin on the BiThumb exchange and send it back to North America, wouldn’t you be giving the arbitrage back or can you purchase altcoins on other exchanges from South Korea?

    • You can. But that’s the reason ALL the other coins are inflated as well. So again. You buy a BTC for 15k on Bitstamp. Move it to Bithumb and of course you can not move the money out of the Country in Fiat.. So you notice Ethr is trading the same as the rest of the world. For argument its trading at 1k even. Your 15k BTC just bought is worth 26k now at Bithumb. So of course you will be able to buy 26 ETH. Buy the ETH Send it to Bittrex and use the ETH to buy back into BTC. Wala! You have just made a tidy multi thousand dollar profit. That is exactly what people are doing. But that too is why if ETH is trading worldwide for 1k that it is actually 2500 on Bithumb. Because the Arbitrage is not single crypto affected. The inflated prices of BTC are trying to be spread across ALL the coins with good liquidity on their platform.
      I have not looked at other South Korean exchanges for Arbitrage opportunities. Of course someone could run coins around between them if there is a margin. I personally do not have the time to do the amount of research to properly trade in the Arbitrage arena.

  2. solomon

    do you do arbitrage

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