Hong Kong Is Paying More For Bitcoin During Political Tensions

The latest cryptocurrency news show that Bitcoin (BTC) has begun trading at a premium in Hong Kong while the political uncertainty produces a widely reported spike in the demand for this coin. Every crypto investor interested in buying BTC in Hong Kong is paying around $300 more per coin, as local data shows.

The data was obtained from the P2P Bitcoin exchange LocalBitcoins which shows traders paying around $300 more per coin than elsewhere. The results were published on August 14 and show that this amount basically means a premium of around 2%. As many best cryptocurrency news sites noted, every user in Hong Kong is paying more because of the political unrest – and countries like Argentina see a similar situation this week.

What’s interesting is that the premium in Argentina at one point reached $1,000 more on LocalBitcoins. It was as such tied to a sudden collapse of the Argentine peso following a defeat of the incumbent president in the primary elections. Both of these events underscore an increasing tendency of treating Bitcoin as a safe haven asset in times when fiat currencies are unpredictable.

In other words, Hong Kong is paying more for Bitcoin because of the destabilization of their national (fiat) currency. Despite the fact that BTC/USD lost around 9% this week, the move pales in comparison to the peso holders in Argentina which saw 30% losses over the same period.

“Bitcoin is becoming the asset of last resort in areas of extreme currency devaluation and political uncertainty,” is what Rayne Steinberg, the CEO of crypto hedge fund Arca, said in an interview with Bloomberg this Tuesday.

The premium is down to liquidity – and as the coming altcoin news show that Hong Kong is paying more for BTC, the situation is growing and might be a scenario in every country where the fiat currency is devalued.

Dovey Wan, the co-founder of the crypto fund Primitive, commented on the LocalBitcoins data too and said that the premium is down to liquidity. As she summed up on Twitter:

“The key diff is: In China there is sufficient local supply of Bitcoin (miners, exchanges etc) but Argentina is lacking local liquidity.”