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Author: bmotrader   |   Latest post: Wed, 18 Dec 2019, 2:29 AM

 

How Hong Kong Protests Affect Bitcoin/Crypto

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Hong Kong is receiving worldwide attention for the series of protests and tension over proposed legislation and its relationship with Chinese authorities. In some way, Hong Kong is the model of a 21st-century city amidst protesting. Scenes of lasers look almost like the opening sequence of a music arena than two groups at war with each other on the streets.

The protesters involved are also turning their back on fiat currencies out of fears that authorities can trace payments with protesting behaviours (seen as crimes), and it may come back to get them convicted in the future. Instead, they are turning to crypto for anonymity and protection.

Protesters are not just reaching for their lasers to confuse police or for their gas masks to protect against tear gas, they are also reaching for crypto exchanges and a Luno Bitcoin wallet to help them slip under the radar. By choosing to use crypto to pay for supplies rather than fiat currency, it will be harder for a higher Chinese authority to state Hong Kong citizens as protestors and harder to convict them of crimes down the line. But what does this mean from Bitcoin and other cryptos?

Surging Bitcoin Demand

The first protests started in the middle of June and at that time Bitcoin was trading at a $160 (USD) premium on one of the most popular Hong Kong exchanges, TideBit. This premium is still active and on the platform, Bitcoin is trading at $11,500, which investors will know is almost $80 above the rest of the market. This is common procedure in Asia where unorthodox fiat currencies may be exchanged. Nevertheless, it evidences that the demand for Bitcoin in the region remains high.

Bitcoin Price Increase

The demand for Bitcoin has led to a value increase. There of course may be more ambiguous factors that lead to Bitcoin’s increased market value, but the surge in value since Hong Kong’s biggest demonstration does suggest a link. Since June 9th when the biggest public protest occurred, Bitcoin has soared in value from around $8000 to over $11000, which is over a 40% value increase.

There are many other reasons that could have influenced this increase, such as the China-US trade war, but without reading tea leaves, it does appear that Hong Kong protests are pushing the value of Bitcoin to the ceiling.

What Does All This Mean for Crypto?

An increase in demand and market value can only be a good thing for cryptocurrency and those already involved or investing in it.

However, from a Chinese perspective, the use of crypto may have been tarnished by acting as a vehicle to protect people enacting crimes. Although to others what they are doing may not be seen as crimes at all. Cryptocurrency has a reputation of preventing criminals just as much as it does at working as a vehicle for crime - and these events may strengthen both arguments.

 

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