Capital Flight & Bitcoin

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People often talk about “capital flight”, Bitcoin, and China.

But is it true? If it is then it must apply to Hong Kong too, right? Well…

This could be a 10K word essay, however charts tell a more detailed story with far less words.

The theory is this: Currency issues and/or restrictions in a country (notably China in the past) force the average person to seek shelter in more safe assets. One of those happens to be Bitcoin at times. So they say.

While it is true that CNY devaluations often happen with BTC prices rising, it is not true that the average citizen of a nation is trying to protect their savings.

We will quickly examine China & Hong Kong vs Argentina & Venezuela.

The first chart is Hong Kong. It shows no large deviation from the BTCUSD price chart. For comparison the second chart, Singapore, was added. It looks much like Hong Kong’s. This does not indicate that the average citizen is using Bitcoin as a channel for capital flight or as a safe haven.

The third chart is China. It shows even less interest as a safe haven. China and Hong Kong are seeing just the ripples of turbulence in their currency. Argentina and Venezuela is what happens if the damn breaks. In those countries we can clearly see Bitcoin is used by the public and is a safe haven. (see below)

Is Bitcoin a safe haven asset? Yes, but only once it’s too late. Maybe there’s a lesson to be learned here??

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