Why is Bitcoin priced higher in emerging markets?

tl;dr: due to capital outflow controls.

Well, the answer is pretty simple. It's not that complicated to understand Emerging markets; most of them have capital controls, which means you can bring money into the country by taking money out, there's usually a cap or a limit, or it's tough to take money out.

Let's say you start an exchange in some country like Pakistan, Nigeria, Bangladesh, India, etc. and you have some bitcoins that you want to sell. So, you go on the exchange, place a Bitcoin for sale, and someone will pay using fiat to buy those bitcoins. They could have INR, PKR, Naira, etc. At some point in time, that supply will finish off. Now, where do you get liquidity?

Well, if liquidity is provided by an outside provider, why would they want to send Bitcoins to Nigeria, and then get Naira for it? They don't wish for Nairas, they want the Dollar. So, you will then have two options, either you intercept dollars before they come into Nigeria, keep the dollars, buy Bitcoin and send the Bitcoin; or mine Bitcoin locally.

So, let's talk about the first example. Let's say remittances are coming into Nigeria. If you were somehow able to get the remittances in the UK, get those pounds, euros, and dollars over there, buy bitcoin from the local exchanges, send a Bitcoin to Nigeria, and sell it. You pay out the people for whom the remittances were initially intended with those proceeds. So that's one way of doing it, whether it's legal or not, is a different question altogether.

The second way of doing it is you mine it locally. When you are mining Bitcoin locally, you can sell it internationally. If you sell it internationally, then you will get Dollars for your Bitcoins, however, chances are there would be no premium. However, if you mine those coins and sell it locally on the local exchange, then you can take advantage of the premium, but your payment would be in local currency only. So, what you can do is sell some of your bitcoins internationally, and some of the Bitcoins that you mined locally, you can sell on a local exchange so you can get a premium of let's say, 5%, 87%, 10%, even as high as 12%. You can sell bitcoin on the local exchange, get the local currency; you can deposit that into your account, and use it for your expenditures, utility bills, etc.

So, the two ways that the emerging markets get liquidity from is either they intercept the foreign currency that will come in, use that to buy bitcoin and then bring those bitcoins in or mine locally. Until these restrictions are in place, you can't eliminate that arbitrage opportunity the emerging markets will have. But once the limits go out, these arbitrage opportunities won't last long. Once it's easy to take your money out, buy bitcoin, bring it back and continue with the same cycle, the arbitrage will level out with the international market.