Why is the South Korean won falling right now?

The South Korean won dropped to a 17-year low around 1,511 per US dollar due to rising geopolitical tensions linked to the Iran conflict. Investors are moving into safe-haven assets like the US dollar, which increases demand for USD and weakens the won.

What is the “kimchi premium” in crypto markets?

The kimchi premium refers to crypto assets, especially stablecoins like USDT, trading at higher prices on South Korean exchanges compared to global markets. It usually happens when local demand for crypto or dollar exposure is strong.

Why is USDT trading below the dollar on Upbit?

USDT is trading about 0.5% below the US dollar on Upbit because demand for crypto has dropped. Instead of buying stablecoins, Korean investors are moving directly into real US dollars and traditional safe-haven assets.

Is it normal for USDT to trade below its $1 peg?

No, this is unusual in South Korea, where USDT often trades above $1 during periods of currency weakness. The current discount signals a shift in investor behaviour away from crypto and towards more traditional financial assets.

What does this USDT discount signal about crypto demand?

The discount suggests weaker demand for crypto trading activity in Korea. Retail investors are not using USDT as a gateway into Bitcoin or altcoins, which typically drives premiums during volatile periods.

How are geopolitical tensions affecting crypto markets?

The Iran conflict is pushing investors toward safer assets like the US dollar, oil, and bonds. Crypto, which is often seen as riskier, is not benefiting from these flows, showing it is still treated as a risk asset in times of crisis.

Why are Korean investors choosing real dollars over USDT?

Investors are prioritising capital preservation over speculation, choosing actual US dollars instead of stablecoins. This reflects lower confidence in crypto markets during periods of macro uncertainty and rising inflation risks.

How could this impact Bitcoin and altcoin trading in Korea?

Lower demand for USDT may reduce liquidity for crypto trading, which could weaken buying pressure for Bitcoin and altcoins. This may lead to lower volumes and potentially more subdued price action in the near term.

Cryptocurrency

Image for illustrative purposes only. Not a real photo.

Won slump flips Tether premium into rare discount

Written by Liezl GambePublished Mar 23, 2026, 12:00 AM

The South Korean won fell to a 17-year low near 1,511 per dollar as escalating tensions around Iran pushed investors into safe-haven assets.

Despite the dollar’s strength, tether traded about 0.5% below the spot dollar rate on major Korean exchange Upbit, marking a rare reversal of the kimchi premium.

The shift reflects declining crypto demand as retail investors move into physical dollars and dollar-denominated assets rather than stablecoins during heightened geopolitical uncertainty.

Historically, Korean traders have paid a premium for USDT during periods of currency weakness and market volatility, using it as a proxy to access dollar exposure and rotate into digital assets.

This time, however, rising oil prices and inflation risks linked to the Iran conflict, alongside foreign equity outflows, have driven a broader flight to safety that bypasses crypto markets entirely.

The unusual discount in USDT suggests digital asset markets are not benefiting from the same safe-haven flows supporting the US dollar, highlighting a divergence between traditional finance and crypto behaviour.

With geopolitical tensions unresolved and pressure on the won continuing, the breakdown of the kimchi premium signals a shift in Korean retail sentiment away from speculative trading towards capital preservation.