Demand For Bitcoin In Hong Kong Set To Soar As Protest Leader Calls For Bank Run
Bitcoin is hoping to become a hot property in Hong Kong.
The region’s political crisis has swept over its banking sector, which is now seeing protestors withdrawing large bundles of cash out of their banking institutions.
The move is the latest tactic to reduce People’s Bank of China’s influence on the Hong Kong economy. Protestors have warned that they would withdraw as much Hong Kong dollars (HKG) as they can. They would further exchange their cash holdings for cryptocurrencies and the US dollar as a strategy to protect their assets and to show the Chinese government that they are in full control.
Cryptocurrency evangelists believe the disturbing scenario could fuel Bitcoin’s demand in Hong Kong.
The bank run comes days after the protest’s leader Chen Haotian called on Hong Kong citizens to withdraw their deposits from their banks on Friday August 16. According to Haotian the primary goal of the bank run is the Chinese banks but he also said that other banks should also be targeted since the Chinese banks can borrow money from other banks to solve problems.
The news of a bank run follows the reports of Hong Kong investors dumping the country’s most valuable stocks amid the protests. Some have speculated that these funds have moved into alternative markets like cryptocurrencies and precious metals.
The bank run threat in the country should be taken seriously as Hong Kong has had bank runs in the past and even attempts during the 2008 financial crisis.
CCN reports that the call for the bank run is gaining momentum in the country with people turning to social media to gang up support. Influential Twitterati Rhythm Trader said on Wednesday that protestors would eventually want to park their cash in non-sovereign assets like Bitcoin.
A portion of money already out of the banking system has landed itself in the emerging cryptocurrency markets, according to LocalBitcoins.com. The peer-to-peer crypto marketplace noted a spike in trading volume coming from the Hong Kong region. Within a few weeks, the volume surged from HK$3 million to HK$6 million.