Hong Kong Citizens Turn to Bitcoin Amid Political Turmoil
Hong Kong is in the middle of a political crisis. Millions of citizens have been protesting since June, sparked by an extradition bill that would have allowed for criminal suspects in Hong Kong to be extradited to mainland China. Opponents argued that the bill would put Hong Kong citizens at risk of unfair and violent treatment by Chinese officials. And they worried the bill would give China greater control over Hong Kong, which China has wanted for a long time.
The bill was eventually withdrawn, but protests have continued, with citizens demanding democracy and inquiries into police brutality. Protesters don’t trust Carrie Lam, Hong Kong’s chief executive. And they don’t trust China.
Today’s chart shows this distrust is seeping into the financial system. Bitcoin trading in Hong Kong reached an all-time high last week. Over the course of the week, more than $12.3 million Hong Kong dollars’ (HKD) worth of bitcoin was exchanged, according to Coin.Dance. That’s more than $1.5 million. And that beats out Hong Kong’s previous bitcoin trading record from January 2018 when $11.7 million HKD was traded.
Bitcoin started the year around $3,700 and traded around $10,000 for most of last month. It’s been trading at around $8,000 for the past week. Meanwhile, people have been fleeing the Hong Kong dollar since July. It’s an easy way for Hong Kong residents to support the protests and send a very public message. And with the escalating violence between Chinese police and Hong Kong protesters, more and more people are registering their dissatisfaction (and trying to spark a bank run) by moving to bitcoin.
Political and economic instability often send people running to bitcoin. That’s because bitcoin has the best security, brand and rate of adoption. And it’s easy to swap native currency for bitcoin using sites like LocalBitcoins and Coinbase. We’ve seen the same thing happen in Venezuela.
As our own Adam Sharp writes:
Bitcoin may be volatile, but it does tend to go up over time. Given a choice between the two ways to store value, many people are choosing bitcoin, the one with a potential to make money.
This is why bitcoin was created. It has reached a milestone and emerged as an alternative store of value.
As the protests continue, bitcoin’s popularity will likely hold steady.