Higher prices on LocalBitcoins coincide with political uncertainty in a move copied in Argentina.
Copycat moves underline fiat distrust
Data from P2P Bitcoin exchange LocalBitcoins showed traders paying around $300 more per coin than elsewhere on Aug. 14, which translates into a premium of around 2%.
Hong Kong is the latest jurisdiction to see investors stump up a higher implied USD price for the cryptocurrency, with Argentina notably in a similar situation this week.
As Cointelegraph reported, the premium there, which at one point reached $1,000 on LocalBitcoins, was tied to a sudden collapse of the Argentine peso following a surprising defeat of the incumbent president in the primary elections.
Bitcoin premium suggests demand for a politically-neutral digital money
Both events underscore an increasing tendency to treat Bitcoin as a safe haven asset in times of fiat unpredictability. Despite BTC/USD losing around 9% this week, the move pales in comparison to peso holders’ 30% losses over the same period.
“Bitcoin is becoming the asset of last resort in areas of extreme currency devaluation and political uncertainty,” Rayne Steinberg, CEO of crypto hedge fund Arca, told Bloomberg Tuesday.
The premium, meanwhile, is down to liquidity, Dovey Wan, co-founder of crypto fund Primitive, commented on the Localbitcoins data.
“The key diff is: In China there is sufficient local supply of Bitcoin (miners, exchanges etc) but Argentina is lacking local liquidity,” she summarized on Twitter earlier this week.