Bitcoin Unaffected by Hong Kong’s Hang Seng Meltdown

Hong Kong’s banal marketplace had its worst time since 2008 this week, with the Hang Seng China Enterprises Index (HSCEI), an scale of mainland China companies listed successful Hong Kong, closing down 7% Monday and dropping different 4% by mid-day Tuesday.

• Overall the HSCEI is down 16% successful the past 5 days, portion the wide Hang Seng is down 11%.

• Bloomberg reported that the Hang Seng Volatility Index, which is utilized to measurement volatility successful the Hong Kong banal market, has topped 40. This is the archetypal clip that the scale has gone implicit 40 since March 2020, erstwhile the Covid-19 pandemic began and planetary markets imploded.

• The terms of bitcoin (BTC) seems to beryllium reasonably unaffected by the marketplace volatility and is astir level implicit the past week. At the clip of writing, bitcoin was trading astatine $38,804, up 0.5% successful the past 24 hours, according to CoinGecko.

• Flora Li, Huobi Research Institute Director, told CoinDesk that this marketplace volatility was mostly driven by regulatory developments successful China and the U.S., and is unrelated to broader macroeconomic factors which is wherefore it has not impacted the crypto market.

• “Last Friday the SEC disclosed a database of delisting risks that included 5 U.S.-listed Chinese companies, sparking capitalist concerns astir the delisting of Chinese stocks, truthful Chinese and U.S. investors person been selling off,” she told CoinDesk via email. Investors successful Hong Kong person besides been selling due to the fact that of connections betwixt the territory’s marketplace and that successful China, she added.

• Even though Hong Kong’s marketplace diminution is regulatory and not macro-driven, immoderate investors are looking down the adjacent word clip skyline and urging caution. Andrew Bakst, CIO of Bizantine Capital, told CoinDesk that helium sees a fragile planetary system that needs to interruption archetypal earlier it tin travel backmost stronger.

• “All-time precocious intra-country wealthiness gaps, on with all-time precocious sovereign indebtedness levels, and all-time highs of inter-country connectivity person created an highly fragile planetary economy,” helium said. “All 3 factors are inflationary and wounded sovereign equities.”

• Despite the deficiency of correlation betwixt Hong Kong’s marketplace volatility and crypto, if there’s a contagion that brings down the planetary market, Bakst is bullish that Ethereum mightiness beryllium the necktie that binds the satellite arsenic it rebuilds.