Investors in Hong Kong and Argentina are currently willing to pay a significant surcharge on Bitcoin (BTC), which is due to increased demand due to the political situation.
Bitcoin Escape highlights mistrust in local currencies
As reported by peer-to-peer crypto local Bitcoins on August 14, a bitcoin in Hong Kong costs $ 300 more than the open market. After all, this corresponds to a surcharge of 2%.
This makes Hong Kong the next country to flee despite the increased prices in the market-leading cryptocurrency. In Argentina, a similar phenomenon was observed last week.
Cointelegraph has reported that the South American country has seen an up to $ 1,000 mark-up on LocalBitcoins in the meantime, due to the peso's short-term collapse in anticipation of the upcoming presidential election.
Demand for a politically independent digital currency is rising
Both the behavior of investors in Hong Kong and the behavior of investors in Argentina suggest that Bitcoin is increasingly perceived as hedging against fiat currencies. Although the overall BTC / USD lost 9% last week, the turnaround is justified as the peso has even fallen 30% lately.
Rayne Steinberg, managing director of hedge fund Arca, told Bloomberg on Tuesday:
"Bitcoin is saving lives in countries where the currency is heavily devalued or there is extreme political turmoil."
The premium that investors in these regions have to pay in turn is made possible by the sudden increase in demand and the resulting shortage, as investor Dovey Wan explains:
"The main difference is that there are enough Bitcoin in circulation in China [for Hong Kong investors], while liquidity in Argentina is much lower."
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