Argentine Bitcoin Premium Shows Relativity of “Safe-Havens”

has been trading for a of between 8 and 28 percent on the Argentina-facing section of LocalBitcoins. The higher prices compared to those advertised by traders on the peer-to-peer marketplace from the rest of the world highlights that demand is high for Bitcoin in the American nation.

With all the current talk of whether or not Bitcoin is worthy for use as a safe-haven asset, the LocalBitcoins figures highlight that a safe-haven asset is a very subjective concept.

You Might Not Need Bitcoin, Don’t Presume Others Share That Luxury

Figures highlighted by analyst Mati Greenspan show that demand is high for Bitcoin in Argentina. LocalBitcoins, a longstanding peer-to-peer marketplace, shows the digital asset trading at eight percent more than it did on the digital currency exchange Bitstamp.

Although adverts on the peer-to-peer network almost always carry a premium (what’s the point in trading if you aren’t taking a profit?), to put the eight percent into perspective, the lowest price of a Bitcoin on the UK-facing version of the website is less that 0.5 percent more than the Bitstamp asking price.

Despite the fact that they help to sensationalise the premium, we should discount the upper figures in the above Tweet. Traders can post whatever price they like on LocalBitcoins, and even the UK-facing site features some traders trying to sell BTC for a more than a 50 percent premium. The 28 percent means very little.

Recent price volatility in the Bitcoin market, the price swinging around the $10,000 level has caused people to speculate as whether the cryptocurrency really can be considered a “safe-haven asset”. When Bitcoin’s price goes up, it is because Chinese citizens are protecting their wealth against the ill-effects on an ongoing trade war with the US. When it drops, Bitcoin is a lousy store-of-value, what a stupid idea…

There is no such thing as a safe-haven asset. There are only safer havens than your current situation. If the worst your government is going to do this year is devalue your currency by 4 percent instead of 1 percent, perhaps Bitcoin represents too much of a risk to store any real value but as a speculative investment of a tiny portion of your net worth, it might be appealing. A safe-haven against that 4 percent drop would have to be much more stable than Bitcoin. Fine art or real estate might be preferable.

This is not the reality for many people around the world. Their governments and central bankers have track records of questionable banking policies and other potential causes of extreme currency devaluation. In these situations, people become more willing to explore other means of preserving their wealth. The number of eligible safe-havens just increased.

Armed with just a smartphone and a handful (or wheelbarrowful) of cash, anyone around the world can buy and hold Bitcoin. In fact, one Twitter user living in Argentina commented on the post above. @ErediaJavi stated that buying Bitcoin at its 2017 peak of nearly $20,000 was one of the best financial decisions he has ever made. This is despite the fact it now sells for around half the price that it did at its very highest point.

The fact that demand has meant that no seller will drop below an eight percent premium on the Argentinian LocalBitcoins highlights that the concept of a safe-haven is relative. Just because something doesn’t offer utility to you in your situation, doesn’t mean it doesn’t to anyone on planet. This line of thought is naive at best and hellishly arrogant at worst.

 

Related Reading: Is Bitcoin Not a Safe Haven? Crypto Crashes in Tandem With Dow

Featured Image from Shutterstock.

The post Argentine Bitcoin Premium Shows Relativity of “Safe-Havens” appeared first on NewsBTC.


Source: newsbtc
Argentine Bitcoin Premium Shows Relativity of “Safe-Havens”

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Right now, thousands of citizens from Hong Kong are protesting certain leaders and opposing a proposed extradition law. Alongside the protests, the country’s political issues are reportedly pushing wealthy Hong Kong residents to move their capital offshore. Since last week, the price of core (BTC) has gained a in Hong Kong as the digital asset has been trading between $75-150 higher than the global average.

 

Political and Economic Unrest in Hong Kong Spurs Capital Movement Offshore

Tens of thousands of Hong Kong protestors have filled the streets of downtown Victoria Park and started marching toward government buildings on Sunday, June 16. The crowds of people dressed in black have been chanting things like “resign” and “withdraw” due to their hatred for the proposed extradition law. The ruling would basically allow Chinese authorities to come in and extradite any Hong Kong citizen to mainland China if they are accused of a crime. It all started in 1997 after Beijing took over and promised to keep Hong Kong’s government intact under “one country, two systems.” Before 1997, Hong Kong was a British dependent territory but the sovereignty over Hong Kong was transferred to China. Everything was fine up until 2014 when pro-democracy protests called the Umbrella Movement stirred the Chinese government and things have never been the same since.

Bitcoin Trades for a Premium in Hong Kong During Protests
Sunday’s protest in Hong Kong was one of the largest turnouts so far.

Crypto proponents believe the current political strife will push more people toward decentralized assets. The protesters demand that Chief Executive Carrie Lam resigns and withdraw her plans to initiate the extradition law. “Our demands are simple. Carrie Lam must leave office, the extradition law must be withdrawn and the police must apologize for using extreme violence against their own people,” John Chow a Hong Kong-based banker, told press on Sunday. Additionally, a few days ago, Reuters reported that wealthy Hong Kong residents have started moving funds offshore to escape possible economic turmoil.

“Some Hong Kong tycoons have started moving personal wealth offshore as concern deepens over a local government plan to allow extraditions of suspects to face trial in China for the first time, according to financial advisers, bankers and lawyers familiar with such transactions,” Reuters explained on June 14. One specific tycoon who wished to be unnamed revealed that the capital outflow has “started,” adding:

We’re hearing others are doing it, too, but no-one is going to go on parade that they are leaving — The fear is that the bar is coming right down on Beijing’s ability to get your assets in Hong Kong. Singapore is the favored destination.

Bitcoin Trades for a Premium in Hong Kong During Protests
The reason Hong Kong tycoons are moving money is because if the bill becomes law, Chinese courts can request Hong Kong courts to freeze and confiscate assets related to crimes committed in mainland China.

The BTC/HKD Premium

In addition to the wealthy individuals moving capital, crypto enthusiasts have noticed a premium on BTC growing larger in Hong Kong. For instance, over the last few days on the exchange Tidebit, the price of BTC has been $75-150 higher than the global average. At the time of writing, 1 BTC is currently 73,100 HKD or US$9,337 in Hong Kong which is more than $100 higher than the Bitstamp price at $9,230. Speculators believe the unrest in Hong Kong has sparked some flow into bitcoin so people can hedge against uncertainty. Other exchanges such as Bitpoint and Liquid show similar BTC/HKD premiums as well.

Bitcoin Trades for a Premium in Hong Kong During Protests
Local.Bitcoin.com buyers in Hong Kong looking for bitcoin cash (BCH).

There’s also been some demand in Hong Kong for bitcoin cash (BCH) on Local.Bitcoin.com as there are buyers looking to purchase BCH in person for cash and alternative payment methods as well. On the data aggregation website Coin Dance, BTC/HKD volumes have been rising week after week on Paxful as well. It’s difficult to say how the Hong Kong government will handle the large protests and whether more money will flow into the crypto economy. As of right now, Hong Kong is not China and they are still two very distinct systems but many citizens fear that some day that will change.


Source: cryptoassethome
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