While Bitcoin is time and again embroiled amidst controversies and turmoil, here is yet another controversy that has surrounded it. As per a Bloomberg report last week, there was a steep rise in Bitcoin trading in Hong Kong. The reason for the same was reported as the protesting citizens turning to cryptocurrencies. While several reports have cited the unrest in Hong Kong to be responsible for Bitcoin’s price rise and touted it as a “safe heaven”, it seems that there is yet another side to this story.
Do We Know About Bitcoin?
Recently, Charlies Yang, a head trader at the OTC Bitcoin trading platform Genesis Block, has refuted all claims by crypto major outlets, stating that this information about people in Hong Kong buying Bitcoin is false and has no solid grounds. Furthermore, he mentioned that not only are people not buying Bitcoin in huge amounts, most of the protestors are rather clueless about the cryptocurrency. Also, he said that there are several retail clients in Hong Kong and nobody seems to be in a frenzy.
“Bitcoin is becoming the asset of last resort in areas of extreme currency devaluation and political uncertainty,”
said Rayne Steinberg, chief executive officer at Los Angeles-based crypto hedge fund Arca.
“In the last week alone, Bitcoin is up approximately 50% against the Argentine peso and trading at a significant premium on local exchanges. And they are not alone, joining the ranks of Venezuela, Hong Kong and Turkey who have also experienced similar shocks.”
Yang further reached out to Bloomberg and concurred that their findings were sourced from a regional exchange or from LocalBitcoins which often have a low volume. In a sardonic laugh, he claimed that Genesis Block would never adjust its pricing on such basis.
While Bitcoin has gained global traction and enjoys the attention of traders and analysts alike, it is not a wise proposition to equate political discontent with Bitcoin’s price movement. An average person is still not very comfortable when it comes to Bitcoin considering it a speculative asset. On the other hand, the fact that it is decentralized is still not known to many.
Bitcoin At Discounted Price In China
Yang further went in to reveal that Bitcoin is trading at a discount in China. The trading giant has been buying Bitcoin OTC in China and then reselling it in Hong Kong to gain profits. While the crypto community was expecting that the Chinese will exit Renminbi to buy crypto assets as a hedge which would subsequently lead to premium prices, such a scenario has not occurred as yet and Bitcoin price is lower than the market average in China.
Considering such slippages and farces, it is clear that while real-world events do create a panic in the crypto space, however, owing to the lack of mainstream adoption, bitcoin still hasn’t reached that stage where a political event can cause significant movement in its price.
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Coming from a physics background the unpredictability and intrigue of the cryptoverse attracted me to take a dive in this field. I am all eyes and ears for the latest trends in blockchain and crypto sphere. Whenever I am not writing or researching, I love to read sci-fi novels, play basketball and watch action movies. I strongly believe that blockchain and cryptocurrency will bring lasting transformations in people’s lives in the years to come. You can reach out to me at supriya [at] coingape.com.