What happened in Hong Kong and the Crypto Markets
As many may know, just two days ago, an estimated 2 million protesters (more than a quarter of the total city population) took to streets of Hong Kong to oppose an anti-extradition bill.
To briefly summarize, the bill was proposed by the Hong Kong government in February to allow the transfer of fugitives to jurisdictions with which Hong Kong lacks an extradition deal, including the mainland, Taiwan and Macau. The officials wanted to pass the bill as soon as possible but citizens are concerned about the possibility of politically motivated persecution and unfair trials in mainland China.
The protests took a number of days. Many young adults of Hong Kong were at the forefront of the protest and the New York Times has captured vivid images of the protest here. One person has died after unfurling a banner during the protest. Even after Hong Kong’s leader Carrie Lam Cheng Yuet-ngor said she would suspend the controversial bill, the protest continued as opponents voiced that they’d accept anything short of the complete withdrawal of the bill and many are also calling for Lam’s resignation.
This morning, Lam offered her “most sincere apology” to the city’s residents during a 51-minute press conference.
What’s happened to the markets? According to one financial advisor that advises wealthy individuals in Hong Kong- “The situation in Hong Kong is out of control. They can’t believe that Carrie Lam or Beijing leaders are so stupid that they don’t realise the economic damage from this.”
Reuters just reported that Hong Kong tycoons have started moving assets offshore anticipating increasing tension between China and Hong Kong. And indeed, for some time and even up to now, we see Bitcoin trading premium going as high as $160 in Hong Kong. It is currently going about $9,277 on the local crypto exchange TideBit, $90 higher than Coindesk’s current rate.
Relatedly, in the last week, in multiple Asian countries, we are seeing similar types of premiums. Exchanges in Korea, Japan and China (via Tether OTC premiums) all saw sustained trading premiums.