- Protestors set fire to a university in Hong Kong and threw petrol bombs at police.
- Many Hong Kongers are selling their homes and fleeing the country to get away from the demonstrations.
- The possibility of capital control stresses the need for a decentralized currency that also acts as a safe store of value.
The Hong Kong protests have entered their fifth month and they’re showing no signs of slowing down. The civil unrest exploded after the government proposed amendments to legislation that would allow criminals to be extradited to mainland China. In September, however, Carrie Lam announced that the government will formally withdraw the controversial extradition bill.
The move was characterized as “too little, too late” and it did not stop anti-government protesters from taking to the streets. On Sunday, fires erupted at the Polytechnic University as demonstrators lobbed molotov cocktails at security forces.
As turmoil grips the semi-autonomous Chinese territory, many Hong Kongers are migrating to other countries. Those who choose to stay are getting creative with their transactions. These unique situations illustrate the safe-haven proposition of bitcoin.
Hong Kongers Can Exploit Bitcoin’s Utility as a Store of Value
Hong Kong’s professional class is considering leaving the tumultuous territory. According to Midland Immigration Consultancy, interest in leaving Hong Kong for good jumped 15 times. Emigration inquiries skyrocketed from 20 in May to around 300 in September. Midland expects emigration inquiries to stay elevated in the next few months as demonstrations continue.
What’s interesting about emigrating Hong Kongers is that they’re selling their houses at a discount to finance the move. According to Ejinsight, an average Hong Kong property costs $1.235 million. Even if the homes are sold at below market value, those who choose to migrate will need a reliable store of value to transport their wealth.
This is where bitcoin comes in. The number one cryptocurrency can facilitate the transport of wealth as Hong Kongers settle in another country. Interestingly, Portugal is one of the top destinations of those who flee the special administrative region (SAR) due to its golden visa policy. Forbes reported that selling cryptocurrencies is not taxable in the EU member state. This adds to the appeal of the number one cryptocurrency.
Bitcoin as a Reliable Option Against Capital Controls
Not every Hong Konger can afford to emigrate. Those who stay may face the wrath of a government fed up with violent demonstrations. Kyle Bass, chief investment officer of Hayman Capital Management, says that Carrie Lam has the power to seize bank accounts and switch off the internet.
If you’re an average Hong Konger, buying bitcoin might be the only way to protect your wealth. For entrepreneurs, accepting cryptocurrencies might be the only way to stay in business. This is happening as HKmap, an app that tracks the presence of police and protesters, is now accepting bitcoin donations. Leading retailer Pricerite is also accepting cryptocurrency payments.
Also, the threat of an internet shutdown is real, creating urgency to buy the largest cryptocurrency. For instance, the government of Iran has blocked internet access to its citizens leaving them with little to no recourse to protect their assets. Should this happen in Hong Kong, they can still buy bitcoin through one of 14 Genesis Block ATMs in the SAR.
The unrest in Hong Kong is opening the eyes of the world to the importance of a decentralized currency that can act as a safe store of value. When push comes to shove, governments have the power to take away your wealth and liberties. Bitcoin fixes that.
Disclaimer: The above should not be considered trading advice from CCN.com. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
Last modified: March 4, 2021 2:41 PM