The political landscape in Hong Kong is currently undergoing severe unrest, after massive protests broke out following a proposed extradition law. The bill in question, if passed, will give local authorities the legal right to deport those suspected of criminal activities, to the Chinese mainland.
Further, it has been reported that the country’s political issues with China have contributed to affluent Hong Kong residents transferring their capital offshore.
As reported by Reuters,
“Some Hong Kong tycoons have started moving personal wealth offshore as concern deepens over a local government plan to allow extraditions of suspects to face trial in China for the first time, according to financial advisers, bankers and lawyers familiar with such transactions.”
The situation has led to local Bitcoin prices rising significantly as Bitcoin has been trading at around $75-$150 above the global average, since the protest took place. Moreover, Hong Kong has recently been witnessing major liquidity issues due to the trade tensions between China and the U.S. The population fears that if such a bill is approved, it might trigger higher capital outflow and thus, further complicate the liquidity aspect.
And while the bill may be delayed for now, Hong Kong officials are keen to take up the bill and push it through the legislative assembly soon.
The protests in Hong Kong may have contributed to a major surge in Bitcoin trading in Hong Kong, as reflected by data from LocalBitcoins. The trading price of Bitcoin in Hong Kong was $9336 at press time, which was more than $100 over the global value. BTC/HKD trading volumes have been growing week after week, suggesting that not only is the inflow of capital into Bitcoin’s economy growing, but a rising number of people are betting on the world’s largest cryptocurrency as a hedge against political and economic uncertainty.
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