Following a dramatic escalation of unrest between the city of Hong Kong and mainland China, the volume of bitcoin traded in Hong Kong has reached an unprecedented height.
Unrest in Hong Kong, a Rise in Bitcoin Price
Protests and violence have been ongoing in Hong Kong for several months, first sparked by a proposed bill allowing authorities to detain “criminal fugitives” and extradite them to the mainland to face Chinese courts, despite the fact that Hong Kong does not currently have any extradition agreements of this nature. Worried that this will allow the Chinese government to have a free hand in curtailing Hong Kongers’ civil liberties, massive demonstrations have broken out.
As early as August 2019, it was discovered that this civil unrest was having a noticeable effect on the price of bitcoin in Hong Kong. Despite a global depreciation in the cryptocurrency’s value, data on LocalBitcoins showed that Hong Kongers were turning to bitcoin in ever-increasing numbers.
As the protests are still turning out massive crowds, the police have begun escalating the level of violence and repressive measures to single out protestors, nearly fatally shooting a teenage student. And this continued tension may be driving local interest in bitcoin even more. Data from Coin Dance measuring LocalBitcoins volume shows that there has been a titanic spike since late September 2019, even more dramatic than the volume increase during bitcoin’s infamous price growth in 2017.
A Trend of Bitcoin Growth
Extensive data collection from usefultulips.org has shown that this rise in Hong Kong is part of a greater global trend in bitcoin acceptance. While places like North America, Western Europe, the Middle East/North Africa, East Asia (outside of Hong Kong) and others have seen a significant cooldown in bitcoin trading in 2019, regions like Eastern Europe and Latin America have seen a dramatic rise.
The driver behind this trend seems clear enough: People living in tumultuous regions are showing a greater willingness to trust in bitcoin as a secure store of value. This trend has been especially observed in sanctioned nations like Iran and Venezuela, the latter of which has even seen the federal government formally consider the use of bitcoin.
Unlike the other regions where bitcoin seems to be growing, Hong Kong is anything but underdeveloped. Hong Kong is a major world financial hub, representing nearly 3 percent of China’s entire economy.