Bitcoin's huge arbitrage play just vanished as South Korea bubble pops

The deepening selloff in cryptocurrencies has just claimed another victim: Bitcoin’s kimchi premium.

Prices for the virtual currency in South Korea have tumbled back in line with those on overseas exchanges for the first time in seven weeks, erasing a gap that had swelled to 51 percent in early January. The premium had been so persistent -- and so unique among major markets -- that traders named it after Korea’s staple side dish.

While its disappearance is partly explained by selling pressure from arbitragers, it also shows how dramatically investor sentiment has deteriorated in what used to be ground zero for the