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Countries Where Bitcoin Trades With A Premium And Reasons Behind

There are several countries around the globe that are now trading their cryptocurrency or Bitcoin with premium. And each country has its own reasons for its involvement in the world of cryptocurrency.

 

Countries That Trade Bitcoin with a Premium

There are some countries in the world that trade Bitcoin with a Premium. Let us take a look and check what are those.

Trading in Hongkong

The most controversial country at the moment is HongKong. Recently, Hongkong is in the global spotlight due to the mass protest against the proposed extradition bill. There are hundreds of thousand locals who went out to the main road to protest the proposed bill. A lot of people were hurt during the protest. Locals are preventing this bill to become a law because once it will pass it would allow extradition to mainland China and once it will happen there is a fear that Hongkong resident assets will be taken away from them. Having said that, several locals are starting to move their assets abroad. Based on the eToro senior analyst, this is because of the public people think that this would be the safest haven of their assets due to the crisis in the country.

 

Cryptocurrency like Bitcoin is a financial hub and an alternative for the Hongkong residents to transfer their asset. which push behind the bitcoin premium there. As of June 18, 2019 base in 8btc Bitcoin surge above $9,000 and still moving up.

 

Status of Bitcoin Trading in Zimbabwe

Another country that locals are transferring their assets to cryptocurrency like Bitcoin is in  Zimbabwe. Zimbabwe is part of the African continent and specifically located in southern Africa. Zimbabwe had been experiencing currency instability and in 2007, hyperinflation has begun. It has reached the highest inflation at 79.6B month on month and by the mid of November in 2018, to 8.7 Sextillions per year. In 2009, Zimbabwe's government stopped printing its currency and used other countries’ currency. Moreover, in June 2019, Zimbabwe's government reinstated of RTGS dollar and now known as Zimbabwe's dollar.

 

And due to the country's worsening economic condition, the citizen of Zimbabwe is now looking to take an alternative turn for their assets and considering cryptocurrencies like Bitcoin and pushing them to get the premium price. It was said that there are over the counter crypto trading platform where sellers are asking for 104,00 dollars per bitcoin. It means that they are charging a premium of nearly 1,000% higher.

 

Earlier, in July of 2019, another Bitcoin huge premium price had been observed. The eToro market analyst Mati Greenspan insists that the premium price increases because citizens are trying to get rid of their US dollars after the government announced the other currencies are no longer legal tender and reinstate the Zim dollar.

 

Another thing to consider why premium in Zimbabwe had a tremendous high increase is because of the lack of local cryptocurrency exchanges. In the first quarter of last year, the Reserve Bank of Zimbabwe prohibited the banks and other financial institutions to provide their services to cryptocurrency exchanges and traders. And because of this, trading of cryptocurrency on over the counter sellers have to bypass the local banks and instead of turning to foreign services provider for the payment.

 

Trading with a Premium in Africa

Africa, which is the second largest and populous continent that has been buying bitcoin, reached 40% higher compared to other countries (Africa's Golex.com).

 

Africa is Illiquid. Bitcoin is traded higher in the following nation like Zimbabwe, South Africa, and Nigeria due to lack of liquidity. If there is a shortage of sellers, there is a big tendency to give high prices and easy selling. Countries such as Nigeria and Angola are even forced to pay as much as 100% mark-up for buying bitcoin.

 

Africa is, unfortunately, one of the worst places in the world to trade cryptocurrency or bitcoin. There is always power blackouts in the area. Internet is also not good, poor connection and mostly local uses data to connect to the internet. However, even if Africans are experiencing all those things, they still get their hands on bitcoin or cryptocurrencies and this is because they are earning a lot out of it.

 

Conclusion

In a recent study, aside from Hongkong, Zimbabwe and other parts of Africa, other Asian countries like Japan, South Korea, and China increased the premium to 5% on the spot price. In Japan, the popular crypto exchange Bitflyer got a 5% increase high. It is safe to say that Asian countries play a major role in moving the higher price of bitcoin.

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