Bitcoin prices were largely unaffected by the Hong Kong stock market meltdown, which saw a number of stocks plummeting in value. The Hang Seng Index plunged more than 3% on Wednesday after losing nearly 2% Tuesday night, with Bitcoin’s price remaining stable at $37852.53.
Regulatory policies led to the Hong Kong market crash, not monetary policies, so crypto has not been affected by the contagion.
The Hang Seng China Enterprises Index (HSCEI), which consists of mainland China companies listed in Hong Kong, dropped 7% Monday and dropped another 4% by midday Tuesday, the stock market’s worst day since 2008.
- Bloomberg reported that the Hang Seng Volatility Index, which measures volatility in the Hong Kong stock market, has topped 40. The HSCEI has fallen 16% in the last five days, while the Hang Seng has decreased 11%.This is the first time that the index has gone over 40 since March 2020, when the Covid-19 pandemic began and global markets imploded.
- According to CoinGecko, bitcoin (BTC) is trading at $38,804 at the time of writing, up 0.5% in the last 24 hours despite market volatility.
- Huobi Research Institute Director Flora Li told CoinDesk that the market volatility was primarily driven by regulations in China and the U.S. rather than macroeconomic factors, which is why it did not impact the crypto market.
- The SEC disclosed a list of five U.S.-listed Chinese companies that could be delisted, which caused investors to panic, so Chinese and U.S. investors sold off recently, she told CoinDesk via email.The territory’s market is connected to that in China, so Hong Kong investors are selling as well.
- Despite Hong Kong’s market decline being regulatory rather than macro-driven, some investors are still warning of caution in the near term. Bizantine Capital’s Andrew Bakst told CoinDesk that he sees a fragile global economy that must break in order to become stronger.
- According to him, the ever-present gap in intra-country wealth, along with the ever-present sovereign debt levels, and the ever-present inter-country connectivity, has created an extremely fragile global economy. “All three factors are inflationary and hurt sovereign equities.”
- Bakst maintains that Ethereum might be the bond that binds the world as it rebuilds, despite the lack of correlation between Hong Kong’s market volatility and crypto.
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Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
