There is a lot of negative news emanating from Hong Kong at the moment. The ongoing protests, also known as the Anti-Extradition Law Amendment Bill Movement, have led to conflict on the streets. Meanwhile, in the economy, there also looks to be a recession on the cards as the embattled region starts to look for alternatives.
One such alternative, that has been the lifeblood of other nations under similar economic troubles, is Bitcoin. The major cryptocurrency has been used as a saving grace for a number of citizens in places like Zimbabwe, Venezuela, and Argentina. Now, as things go from bad to worse, Hong Kong citizens are hedging their bets.
Data pulled from Coindance on the volume for LocalBitcoins, the peer-to-peer trading platform for cryptocurrencies, in Hong Kong has shown a new all-time-high being breached as citizen clamor to try and save some of the value in their money.
This spike has seen $12.3 million HKD ($1.5 million) in a single week, which also represents more than tripling from the week prior. Some of the reasons for the rapid move to Bitcoin could well have to do with recent news of ATMs in Hong Kong running out of money, sparking additional fears.
This growing trend of individuals flocking to Bitcoin in times of financial uncertainty is one that is becoming more common, but also one that is becoming drastically more concerning. There is financial uncertainty gripping the globe; from the US and China to Europe and other G7 nations, not to mention the problems with other failing economies.
Many had already suggested that Bitcoin could be a global hedge in the face of a potential global economic recession, especially when its price started rising on negative news for the world economy. However, now more than ever, for citizens of embattled countries, ‘sBitcoin’s value truly shines.
Much more is being understood about Bitcoin and how it operates in a decentralized manner. This narrative has been spread by the likes of Bitcoin bull Morgan Creek Digital co-founder Anthony Pompliano, but with the Hong Kong example, his story takes flight.
“I ultimately believe that people are going to opt for something that is not manipulatable, is not seizable, is not censorable, etc. And so I think people are going to continue – slow at first – but over time, more and more people will choose a currency that the government does not control.” Pompliano expressed.
The sentiment surrounding the current climate is one of despair and disheartenment. Former bankers, such as Oswald Gruebel, who led both of Switzerland’sSwitzerland’s two biggest banks during his career, has criticized negative interest rates which are one government-mandated ploy to affect monetary policy.
Bitcoin is building to be an alternative that, in time, will become more viable a normalized. When times of economic uncertainty hits, there could be a shift to a decentralized system, and then no real reason to shift back.