As Bitcoin cracks $9,000 to reach a yearly high topping $9,300, Hong Kong residents are paying a premium for the world’s largest cryptocurrency.
The digital asset is reportedly being used as a safe haven for wealthy residents in Hong Kong who are looking for a way to protect their funds against a proposed law that would allow the government to extradite alleged criminals to mainland China where they would tried.
The extradition bill would impact Hong Kong’s status as a financial powerhouse, affecting not only Hong Kong residents but also foreign nationals who are living or traveling through the territory.
A financial advisor reports that capital flight is underway.
“The fear is that the bar is coming right down on Beijing’s ability to get your assets in Hong Kong. Singapore is the favored destination.”
Since extradition would allow officials to seize assets, wealthy investors and crypto enthusiasts are turning to offshore investments and alternative digital assets, such as Bitcoin.
Local crypto exchange Tidebit shows that the price of BTC is roughly $160 higher than the global average.
Bitcoin is trading at a premium of about $160 in Hong Kong.
Pictured is the HK exchange TideBit where a single BTC is going for 73,120 HKD ($9337). A total of $159 above Coindesk's current rate.
This is where the safe haven play comes in. pic.twitter.com/HNZWQkJ61j
— Mati Greenspan [tweets are not trading advice] (@MatiGreenspan) June 17, 2019
Millennials in black t-shirts organized a historic “Black March” in Victoria Park on Sunday, where protestors demanded the withdrawal of the controversial extradition bill and the resignation of Chief Executive Carrie Lam. Organizers report that the march was the largest in history with nearly two million people participating, representing 27% of Hong Kong’s 7.4 million residents. This was the second consecutive weekend of protests.
BREAKING: Hong Kong just made history and by a long shot! Protest organizers just announced nearly 2 million people hit the streets in Sunday’s Black March. They demanded Carrie Lam revoke all extradition proposals – and resign. @CBSNews is here. #HongKongProtests pic.twitter.com/oRNqu3WXvJ
— Ramy Inocencio 英若明 (@RamyInocencio) June 16, 2019
Armed with marching fists, goggles and helmets, the protestors withstood a violent blowback from the police who cracked down with smoking canisters, tear gas, rubber bullets and water bombs.
— Nathan VanderKlippe (@nvanderklippe) June 12, 2019
Roughly six hours after the march started on Sunday, Lam issued an official apology to Hong Kong residents.
“The Chief Executive admitted that the deficiencies in the Government’s work had led to substantial controversies and disputes in society, causing disappointment and grief among the people. The Chief Executive apologised to the people of Hong Kong for this and pledged to adopt a most sincere and humble attitude to accept criticisms and make improvements in serving the public.”
Protestors are still demanding that Lam step down, despite her apology. CNBC reports that 2,000 protestors, fearing that Lam will eventually try to push through the extradition proposal, gathered outside the Hong Kong legislature on Monday to address her directly.
Analysts on CNBC Fast Money speculate that American investors are not aware of what may be driving the price of Bitcoin and that factors such as the protests in Hong Kong are not necessarily on the US radar.
Says Michael Santoli,
“Also gold is breaking out. People are trying to get money out of Hong Kong. That could be another reason why Bitcoin is rallying. And there’s a lot of instability, uncertainty about the Fed and things like that.”
Responds Andrew Sorkin,
“That goes back to the whole idea that us in the US have no idea about Bitcoin. It’s not about us. It’s never been about us.”