The number of Hong Kong Bitcoin users has grown impressively lately. In fact, Bitcoin use has recently reached record levels in the former British colony.
Why is this the case and what factors are behind it? By looking into this matter, we might also understand when people in other places will turn to cryptocurrencies in the future.
What Is the Reason for the Increased Bitcoin Use?
Hong Kong is currently undergoing a major political crisis that started earlier this year and shows little sign of ending. Huge numbers of citizens have been protesting on the streets about proposed new extradition laws. The strong crackdown methods carried out by the authorities have served to deepen the crisis.
At the same time, figures show that Bitcoin trading here climbed to a record-high level. Over 12 million HKD (around £1.3 million) in BTC was exchanged in a single week at the end of September. This beat the previous record that was set in early 2018 and translates to over 170 bitcoins being traded in a week.
Is the increased crypto use related to the protests? At the moment, there is no direct link established between the protests and the growing interest in digital coins. Yet, many analysts have linked the Hong Kong cryptocurrency boom to the ongoing political issues.
The problems here have already led to an impact in the traditional financial sense, too. Hong Kong has been downgraded from AA+ to AA and stock prices have fallen considerably as well.
It has been suggested that the protests have changed how locals think of the Chinese government. This could help to explain why they are now looking for an alternative to banks and other financial institutions.
What Could The Hong Kong Bitcoin Boom Mean for Other Countries?
We have already seen how rising inflation levels in countries like Argentina, Venezuela and Zimbabwe encouraged locals to turn to Bitcoin and other cryptocurrencies. Could the situation in Hong Kong show that cryptocurrencies are also going to grow in times of political turmoil?
It is too early to be certain, but it certainly seems like an indication that this could be the case. It is easy to imagine a situation in which many citizens decide to protest by turning to digital money.
Another possibility is that people use cryptocurrencies when they lose confidence in a government or look to force change. The latest Hong Kong Bitcoin figures help us to see that this type of digital money could be increasingly useful in a number of situations.