On the afternoon of August 12, the CYBER token surged violently from $1.88 to $4.34 after being listed on South Korea's largest exchange, Upbit, with a daily increase of over 130% and a trading volume that skyrocketed by 500%, briefly pushing its market capitalization above $170 million. On the same day, a multi-signature wallet from the project team BuildOnCyber transferred 1.744 million CYBER (worth $6.18 million) to Binance, causing the market to instantly fall into concerns about selling pressure.
This is not an isolated incident—HYPER surged 170% within 24 hours after being listed on Upbit and Bithumb, and the Story Protocol token IP rose 16% upon its launch—South Korean exchanges seem to possess a magical ability to turn stones into gold.
In South Korea, cryptocurrency is no longer just an investment tool; it has become a "social ladder" for the younger generation seeking upward mobility.
Upbit, backed by South Korea's richest man Kim Beom-soo's internet empire Kakao Group, is the first government-approved compliant exchange in South Korea, boasting 8.9 million users who have completed real-name verification, achieving a penetration rate of 17% in a country with a total population of 52 million. Its deep integration with national applications Kakao Talk and Kakao Pay makes trading as convenient as chatting, creating a massive traffic moat.
The daily trading volume of South Korea's top five exchanges (Upbit, Bithumb, Coinone, Korbit, Gopax) reaches $14.59 billion, equivalent to twice the trading volume of the Korea Composite Stock Price Index. This scale of liquidity allows the South Korean market to drive token prices independently of global trends in a short period.
Investors aged 20-30 account for 31%, replacing those in their 30s as the largest investor demographic. Koo Jeong-woo, a professor at Sungkyunkwan University in South Korea, points out, "The MZ generation in Korea faces fierce job competition, unstable employment, and skyrocketing housing prices, making cryptocurrency the only hope for class mobility." This social anxiety translates into a high-risk appetite, prompting them to chase new tokens.
Strict regulatory scrutiny has instead reinforced the head effect. After the implementation of the Special Financial Transactions Act, only four fiat trading exchanges (Upbit, Bithumb, Coinone, Korbit) out of hundreds in South Korea achieved compliance, forcing a large number of users to concentrate on leading platforms. When Upbit listed SOL, MATIC, and other tokens six months later in October 2023, NU surged nearly tenfold in a single day—suppressed demand burst forth like a floodgate.
Whenever Upbit announces the listing of a new token, the South Korean community refers to it as "석우절" (Seokwoo Day, derived from the phonetic sound of Upbit's owner's name), as Bitcoin often drops due to capital transfers at this time. This "sell Bitcoin to buy new tokens" behavior is a direct driver of the kimchi premium.
The performance of CYBER on August 12, 2025, is a textbook case:
Price trajectory: $1.88 → $4.34 (peak increase of 130%)
Trading volume: Soared from tens of millions of dollars to $733 million within 24 hours
Market capitalization: Jumped from $80 million to a peak of $170 million
This trend is not limited to mainstream tokens. In July 2025, the meme coin HYPER surged 170% within 24 hours after being listed on Upbit and Bithumb, doubling its market capitalization to $55 million. Even the TRUMP token (a Trump-themed meme coin), which lacks practical applications, saw a surge in trading volume after being listed on Upbit due to the simultaneous opening of trading pairs with KRW, BTC, and USDT.
However, behind the feast lies hidden concerns. According to data from the Financial Supervisory Service of South Korea, among the 1,482 tokens listed by the five major exchanges from 2018 to 2024, 34.9% (517 tokens) have been delisted. More alarmingly, 20% of tokens survive for less than a year, with an average listing cycle of only 748 days. DigixDAO (DGD) even lasted just 77 days before quietly exiting.
In December 2024, the Layer2 project Movement Labs' token MOVE staged a classic scene:
Upbit price: $2.6
Binance price: $1.2
Premium rate: 150%
This price difference stems from the closed arbitrage environment of South Korean exchanges. When MOVE experienced a premium, platforms like OKX and Bitget immediately closed withdrawal functions, blocking the arbitrage channel. Moreover, South Korean exchanges require real-name verified bank accounts, making it nearly impossible for foreign investors to participate in arbitrage, leading to sustained premiums.
Upbit accounted for 10.88% of MOVE's global trading volume, with a 24-hour trading amount reaching $1.36 billion, making it the largest trading platform. This concentration allows the South Korean market to form a price high ground, further reinforcing the independence of "Korean prices."
The implementation of the Virtual Asset User Protection Act on July 19, 2024, became a watershed moment. The law stipulates that meme coins without substantial projects must be listed on large overseas exchanges for at least two years before they can be traded in South Korea, directly leading to a sharp reduction in the number of tokens listed:
Total tokens listed in Q1 2025: 71
Q2: 75
Q3 (after the law's implementation): 45 (a 40% decrease)
Upbit's strategic adjustments are intriguing. Meme coins like MEW, BRETT, and PEPE, which were listed after the law took effect, do not meet the two-year requirement, but they share a common point: they were previously listed on Bithumb. This "follow-the-leader strategy" essentially allows Bithumb to bear the initial review risk.
Deeper regulatory pressure comes from listing responsibilities. While there were no delisted companies in the South Korean stock market during the same period, the 34.9% delisting rate of tokens has raised social concerns. Hwang Seok-jin, a professor at Dongguk University, bluntly states, "Exchanges charge fees but do not fulfill their review obligations, leaving all losses to investors."
Institutions have developed a routine in exploiting the "kimchi effect." When HYPER surged, the community accused the project team of "throwing chips to South Korean investors by listing on Upbit." The operation of the CYBER project team transferring $6.18 million worth of tokens to Binance on the day of the Upbit surge further exposed the arbitrage intentions of insiders.
The sustainability of the premium is in doubt. When Bitcoin reached a "historic high" of $12,000 on Upbit (approximately 120 million KRW), the global average was only $70,000. This premium, detached from fundamentals, will eventually revert—MOVE dropped to $0.9 the day after peaking at $2.6, representing a 14% discount compared to the Binance price.
Yet, opportunities still lie within. Enlightify announced a $20 million investment to be made in CYBER over 12 months, precisely targeting the long-term liquidity premium brought by the South Korean market. As a Layer2 project integrating AI and social features, Cyber reached 5 million users after being listed on Upbit, far exceeding the boundaries that technology itself could reach.
When Movement Labs' token MOVE opened at $2.6 on Upbit (only $1.2 on Binance), a Seoul University student bet all their part-time savings on the new token, hoping to replicate the wealth myth of "buying an apartment without a loan" from their predecessors; at the same time, the project team transferred millions of dollars worth of tokens into the exchange wallet. The halo of South Korean exchanges injects golden liquidity into projects while also providing perfect cover for speculators. As the Virtual Asset User Protection Act takes effect, the frenzy surrounding meme coins is cooling down, but the speculative desire deeply rooted in South Korean society will continue to seek new outlets with each token listing announcement.
Related: Traders say if Bitcoin (BTC) hits $150,000, Ethereum (ETH) could reach $8,500
Original article: “Unpacking the Kimchi Premium: The Frenzy and Risks Behind Upbit's Instant Price Surges in South Korea”
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