The Bitcoin Demand in China is Skyrocketing

The Bitcoin Demand in China is Skyrocketing
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China is going through something of a pivotal period right now, but it seems that this catastrophe might be working out pretty well for Bitcoin.

Data from P2P exchange LocalBitcoins currently shows that traders in China are paying about $30 more per Bitcoin token than any other country. Essentially, it means that these people are paying about a 2 percent premium. The premium is similar to the one in Argentina. As at yesterday, trading data from Buenbit, an Argentine-based cryptocurrency exchange, showed that Bitcoin trading was pegged at about $11,750, as opposed to an average of about $11,300.

The premium on Argentina reached $1,000 at some point, following a sudden collapse of the Argentinian Peso and the defeat of the incumbent president at a primary election poll. All of these caused a bit of an economic upheaval, and investors seem to have so far preferred to use Bitcoin instead to safeguard their holdings.

Well, something similar is happening in China. The country has been locked in a deadly, contested trade war with the United States for the better part of 18 months now, and last week, things went up a different notch. U.S. President Donald Trump announced that Washington would be placing a 10 percent tariff on about $300 billion worth of goods coming in from China, with many believing that a retaliatory move would come soon from Beijing.

Well, a retaliation came in some sort; less than a week after the tariffs were announced, the Chinese Yuan suddenly fell to less than 7 to the dollar, as many believed that China was deliberately devaluing its currency to stifle the greenback. Beijing eventually took a heel turn, with the Peoples’ Bank of China buying more of the local currency to keep things steady and prop up the Yuan in the meanwhile.

Regardless, the tensions between the two economies are at an all-time high. Then, there is some political upheaval in China, as well. Since last Friday, the Hong Kong International Airport has been the site of mass protests from thousands of Chinese citizens over the need for greater freedoms and democracy.

The airport, one of the busiest in the world, became the focus of these protests, following weeks of unrest that isn’t showing any signs of abating. Amongst other things, the protests are being fuelled by fears that Hong Kong’s freedoms as a special administrative region in China are being curtailed.

Flights at the airport were grounded on Monday and Tuesday, and they only resumed early this morning. Investors are panicking, and Bitcoin is thriving off this widespread hysteria.

Both of these events have underscored Bitcoins characteristic as a haven in unpredictable times. Bitcoin might have dropped 9 percent against the dollar this week, but the Peso has lost more; a stunning 30 percent. The Yuan might continue to hold steady against its American counterpart, but given how awry this trade war can go at just about any moment, the uncertainty is still high.

About Jimmy Aki

Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.

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