Bitcoin Demand Spikes in Hong Kong Despite the Price Drop

Asia Blockchain Review
August 25, 2019

As some analysts are confident that Bitcoin (BTC) has become a genuine safe haven currency for investors, people in Hong Kong have been seeking the cryptocurrency amid the political uncertainty, according to a report by Forbes. 

The price of Bitcoin recently fell by almost 10% in early August. However, it has been trading at a premium in Hong Kong, where large protests are still taking place and are likely to continue indefinitely.

Bitcoin to Safeguard Money in Times of Crisis

According to data from P2P Bitcoin exchange LocalBitcoins, traders were paying higher prices for Bitcoin, which account for a premium of around 4%.

Hong Kong airport has meanwhile resumed operations following a two-day lockdown. The protesters had forced the airport to cancel all flights, preventing a number of tourists from traveling back home. 

Chinese banks have tried to deactivate their ATMs in order to prevent protestors from making cash withdrawals, while state officers are allowed to seize cash upon arresting a person suspicious of causing riots. As the situation has left Hong Kong protestors with few options to protect their money from the police, many have started turning to Bitcoin, according to News BTC. 

Bitcoin Demand Reflects Fiat Money Distrust

Hong Kong is the latest country where investors have had to pay a higher implied USD price for Bitcoin, while Argentina was previously in a similar situation.

According to Forbes, the premium, which at one point reached as high as US$1,000 on LocalBitcoins, was purportedly related to a sudden collapse of the Argentine peso following the unexpected defeat of the incumbent president in the primary elections. 


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