P2P Hong Kong Bitcoin Trading Hits Record Highs Amid Surveillance Crackdown

Journalist:
Will Heasman @wjheasman
October 2, 2019

Amid the escalating chaos of the anti-government protests in Hong Kong, bitcoin’s trading volume has hit an all-time high on peer to peer exchange, LocalBitcoins.

Residents of Hong Kong are still staggering from what was an exceptionally violent week of protests. The outrage over the now- withdrawn extradition bill has boiled over into issues such as income disparity, and democratic prerogative. Yesterday, the protests reached a fever pitch, as police switched rubber bottles in exchange for live rounds of ammunition; one of which struck a young protestor in the chest. The 18-year-old was subsequently detained and treated, with officials noting that his condition was stable.

A Push and a Shove Towards Bitcoin

With explicit tensions manifesting between the state and the protestors, it seems as if residents are taking their financial matters into their own hands – avoiding Hong Kong’s volatile economic situation by placing more of their wealth into bitcoin. Indeed, back in June when the protests initially broke out, bitcoin presented a $160 premium on Hong Kong-based exchange TideBit; a clear indicator of surplus in demand.

According to data obtained from CoinDance, LocalBitcoins, a popular, peer-to-peer bitcoin exchange, is depicting a new all-time high for bitcoin trading volume in Hong Kong.

Bitcoin volume in Hong Kong dollars | Sources: CoinDance/LocalBitcoins

In the past week alone, there has been a noticeable uptake in bitcoin trading, with approximately $12.3 million HKD exchanged in total. This sudden deluge of bitcoin volume marks the highest level ever recorded by LocalBitcoins in Hong Kong. The last time volume even got close to today’s record-breaking volume, was back in January 2018, at the tail end of bitcoins monumental parabolic run in 2017.

Safe Haven?

With Hong Kong’s ever-worsening economic situation and signs of a recession looming, some argue that this inevitable leap into BTC is just another example of its budding use as a safe haven.

This was suggested by eToro’s Senior market analyst, Mati Greenspan, who noted that BTC was clearly being “treated as a safe haven,” within the city.

Mati Greenspan on bitcoin’s use case as a safe haven | Source: Twitter

Speaking to CCN, Greenspan elaborated on this belief, suggesting that citizens within the city are likely choosing to ‘opt-out,’ of the financial system:

“Though it’s impossible to know for sure, what seems to me is that some are using this as a form of divestment. One of bitcoin’s key features is the ability to opt-out of the economic system. Many Hong Kongers are clearly not happy with the status quo and are likely looking to take their wealth out of that system.”

Much Needed Anonymity

On top of this, it seems BTC may also be providing some much-needed cover against government surveillance.

It’s perhaps no surprise that the Chinese government monitors its citizens’ online presence closely. The very same technique is purportedly being utilized within Hong Kong too, with suspicions arising of officials sourcing for information concerning the demonstrations. The growing anxiety around this issue forced Bejing officials to respond, noting that police only perform routine ID checks as per normal patrols.

Crypto venture capitalist, Dovey Wan, highlighted this need for anonymity, especially in China where many payment solutions require formal identification :

Dovey Wan hints at rising bitcoin use in China | Source: Twitter

While Greenspan remarked that bitcoin was, in his opinion, a “very poor vehicle for anonymity,” he did concede that it was still “more anonymous than the banking system,” – a fact that is especially true within China.

With this latest example of an appetite for bitcoin, a legitimate argument is mounting for BTC’s use – both as a safe haven and an instrument for financial privacy.

This article was edited by Samburaj Das.

Last modified (UTC): October 3, 2019 11:19

Will Heasman @wjheasman

Will is a freelance journalist based in London, UK. He has been involved in the cryptocurrency industry for over 3 years, and fully believes in its capacity to change the world. Follow him on Twitter at wjheasman. Tips and PR: wjheasman@gmail.com