Bitcoin Forum

Re-post from Noob sub-forum now that I have posting privileges.

Hello All,

I live and work in China and bought Bitcoins through BTC China in October. On the way down I sold my coins.  I sent a few back to Coinbase on the last huge sell-off and arbed the market. In the process I cashed out my initial investment.

I currently have a nice chunk of fiat sitting on the BTC China exchange and I believe there is no way the government will allow any further funding from banks or 3rd parties to the exchanges, so my question is this:

What do you guys think will happen with the BTC China exchange?

My speculation:

When current BTC China users realize the market is not coming back in China many more will withdraw CNY from the exchange, the price will collapse to new lows as users get out of BTC and back into CNY.  Bitcoin becomes extremely cheap compared to other exchanges.  At this point I buy all I can and transfer out.

Please discuss your thoughts on this scenario.

Thanks

A slow and complete exodus as both CNY and BTC flee the exchange. Although the price will probably continue to stay lower, it is unlikely to go too much lower than western exchanges because BTC could be sold by other means, so the Chinese won't just sell them for next to nothing.

The endgame is 0 CNY, 0 BTC and no trades.

Agreed, volume is already drying up on BTC China and OkCoin.

True, however, if the Chinese prohibit CNY withdrawals (which I think will happen next), It will be very difficult for average users to sell their existing Bitcoins and cash out.

They could sell bitcoin at BTC-E, cash out as USD code, and sell the code for CNY. I predict this as the future of bitcoin trading in China

Interesting.  What do you mean sell out as USD code and then sell USD code for CNY?  Also, how would you then get the CNY back to China? I would think this would be a huge hassle and incur a lot of fees.  What would this do to the price of Bitcoin on Chinese exchanges?

You bring up an interesting point about future Bitcoin trading in China.  I really think it will effectively be pushed underground.

Related to the above post:

I think it's wishful thinking to think China will recover.  I think it is game over in China.  I've been here 4 years now and have a decent idea the way the government operates. 

First, they seemed open and friendly to Bitcoin.  A tactic only, while behind the scenes they viewed it as a threat and tried to determine how to move against it.

Second, they released a vague and general statement through the PBOC banning financial institutions from involvement in Bitcoin, while still stating individuals are free to own it.  Again, on the surface appearing accepting of Bitcoin, but those that understand how government works here, reading between the lines as a warning shot to get the hell out.  My Chinese girlfriend actually read the press release and warned me in advance that Bitcoin was now being taken seriously by government.

Not long after, a secret meeting was held with payment processors to stop all funding of exchanges.  Again, moving in the direction of a complete Ban, but still leaving the door open for individuals to trade bitcoin and withdraw back to CNY.

Next step???  I believe they will set a time banning financial institutions from allowing CNY withdrawal.  The government is just corralling the herd.  Once this happens, a stampede to get money off chinese exchanges happens.  Price falls dramatically.

Result:  Bitcoin still legal to hold and trade just as the government initially had said.  However, essentially worthless for the average Chinese without a foreign bank account.

On BTC-E, one can withdraw his USD (or EUR and RUR) balance as a redeem code (with 0 fee). Whoever gets this redeem code can collect the USD. Therefore, a Chinese user who wants to sell their bitcoin could sell on BTC-E, and withdraw as USD redeem code, and sell the code to someone else within China for CNY through payment processor Alipay (zero fee or very very low fee). The whole thing is zero fee (except the 0.2% BTC-E transaction fee). It is better than direct OTC XBT/CNY exchange because the USD/CNY rate is much more stable.

Bitcoins can be sent to any other exchange in the world and cashed out in other currencies.  It's not that expensive (same as Americans using Gox)

If it's harder to buy bitcoins in China, then bitcoins will be worth more in China.

(I live in China - I bought some more with the last money I had on btcChina and withdrew bitcoins - I didn't sell after the announcement, nor did I withdraw RMB)

Wow, I didn't know that.  Could be an option for me as well.  Thanks.

However, I highly doubt anyone except the die-hard BTC user would be doing this.  I think most folks that got involved in China during the run-up were just looking to speculate and make a quick and easy return on their money.  Maybe down the road, as Bitcoin gains in value and is more established in the world more Chinese would do this.

Why? You felt the news was neutral pricewise or that in time the price will skyrocket in China?

I'm quite surprised the gap between Chinese BTC prices and BTC prices elsewhere is rather low.  People must be finding a way of bypassing the capital control.

I understand that Bitcoins can be cashed out on other exchanges, but it's much easier for you and me with foreign bank accounts.  I really don't think typical Chinese are gonna go through the hassle, unless of course, the opportunity cost becomes too great.

Doesn't Gox have the opposite problem as exchanges in China.  Sure, I can cash out on my Chinese exchange, but how do I get money back on the exchange to buy Bitcoins.  Isn't that why current BTC-China rates are now lower than all other exchanges. You and I might have kept most of our money on the exchanges, however I'm certain many pulled their money off the exchanges and now have no way of refunding.   

I guess my point has to do with the Chinese exchanges.  Your assuming Bitcoins are scarce in China.  In the future I agree, but right now there is a surplus of coins on Chinese exchanges and no way to get funds to buy them.  One more shake of the tree by the PBOC and more are gonna unload and cash out.

what about localbitcoin ?

Good point. Word is Chinese are still able to re-charge CNY on a couple of minor exchanges (huobi and btc38).  

It certainly isn't gonna last too long as the government seems to be pretty serious about going after BTC.  Watched the recent interview of Bobby Lee.  Substantial change in his demeanor since the Stanford talk, and he seemed quite agitated.  I think he knows the what's happening but is powerless to do anything.  

I haven't tried localbitcoin, but I'm sure that will become an option down the road.  But as far as massive centralized exchanges go, I think that little experiment in China is over.

I don't understand why Chinese guys want to sell bitcoins and get CNY.
The smartest move would be spending all remaining on exchange CNY to buy cheap bitcoins. This will be the best investment in their life.
I bet the owner of BTCchina has already grabbed as much as possible BTC and has become the part of bitcoin elite.

Even if you need to convert some of bitcoins in CNY, you can just go to Hong Kong, sell BTC for USD and then convert it into CNY.

Because most (not all) Chinese are drones and will do what ever big daddy government tells them to do.  Any kind of problem and the next answer out of everyone's mouth is how will the government handle it.  Also, most here don't really think about the inflationary nature of CNY fiat, at least not to the degree we do in the West.

Exactly.  It doesn't take a lot, in percentage terms, of Chinese people who have some extra money to put them in bitcoin to protect themselves from the currency controls, inflation, seizures etc. to make a large difference in price.

At worst they can eventually cash out overseas and have an escape valve if it comes to it.

Case for BTCChina shutdown is very real

Yeah, that seems obvious. Bitcoins just became more scarce in China. For those that understand the nature of rising global demand for them, it's a no-brainer to convert all remaining CNY to bitcoin, send the bitcoin to cold-storage, and forget about it for a while. Especially for a citizenry under heavy capitol controls without any obvious non-overbought place to put investment capital, I would think taking this final near-term opportunity to snag bitcoin would be the obvious play.

Who is going to take up the slack left by Chinese buyers? who will support and lift the price now?

why do peeps come up woth these insane conspiratorial theories about what Chinese investors/exchanges are doing or not doing to the price of btc. why peeps just can't accept the natural order of the markets? what goes up quikly also be coming down quickly shortly after. or is it nobody knows two fcuks about trading  ???

A no-brainer, huh? This is the standard bitcointalk bull talk. I suspect the average Chinese bitcoin investor does not think like this.

Why would the chinese buy into something that is useless to them and is obviously tumbling in value? There is no way you can spin the btcchina shutdown into something positive or even neutral. The point that making it illegal will increase volume via the black market is preposterous. This isn't meth, btc doesn't get you high - in fact it doesn't do  damn thing except represent something of value.
I believe in and find this technology fascinating. I do think it has long term  implications, but for the medium term it's value is fucked.

I don't think avg Btc user in china is dumb. The dumb ones have already converted.

The remainder will see Btc as a hedge. They have foreign accounts or know someone that does or are planning to travel.

Btc going underground in china will be interesting because we could see a full Btc ecosystem emerge. Cny for day to day stuff. Btc for foreign investments, gambling and other purchases.

How else can one play Satoshi dice, move large amounts of money overseas instantly or buy stuff overseas with less detection?

In a land where empty apartments are used as savings, btcs aren't necessarily a bad option.

This is the standard bitcointalk bull talk.

No one with this outlook has demonstrated an understanding of Chinese investors, the degree of importance of CCP's position to them, or how this will unfold -- clearly the situation remains unresolved.

How do you know that a) the "dumb ones" have already converted, b) the remainder will see BTC as a hedge? And what are those proportions? It's funny because previously I recall so many perma bulls saying regulation will drive the price up -- now prohibition will. (No comment)

As a western 20-something year old Bitcoiner, let me tell you what those Chinese people really are thinking. Didn't we have enough of this nonsense on r/bitcoin?

Bitcoins are not consumed. They can only be held and sold.

Rationalize it all you want, making an asset less liquid is bearish. Making an asset more liquid and accessible is bullish.

+ 1

Bitcoin is more and more speculative and less utilized as currency. When money stops flowing, hodlers will come crying..

I'm pretty amazed at how few comments and how little insight there has been from Chinese people in China on any English-speaking boards. They may as well be living in a distant galaxy.

None of the developments there are positive. None of them should be remotely surprising to anyone. It is preferable that the developments were firm and rapid rather than happening further down the line.

There is a chinese player who is very clear about the reality of this, its over, game over, check mate. Check out /u/lovebitcoin on reddit. The chinese are well aware, only the west thinks this is somehow possible to solve. Its not.

Yes bitcoin is crippled in China. This is an obvious truth. But the typical bear talk is to assume that China was very important to Bitcoin. But, I contend, it was not.  China was never going to lead bitcoin anywhere. Yeah, they pumped the price higher than it would have normally gone quickly than it would have normally gone there. But, make no mistake, bitcoin is FAR better off long term having the US lead it. China is smoke and mirrors. They weren't going to lead shit.

This is all contextual. I think it is difficult to argue that China is not very important when our exchanges are tied to BTC China. This hasn't changed. I agree with what you are saying, but given the current circumstance....

Yes, but I contend that this is a weird short term situation driven primarily by day traders who are trying to figure out how much China mattered. So we have this weird situation where Gox and Stamp should just ignore China, but are waiting and watching.

I think this will resolve itself after Christmas (or after the new year) when new investment comes into the market, while BtcChina dissolves. Then I think it will be plain and obvious that China did not have that much impact on bitcoin and the markets can get back to being driven by healthier more stable fundamentals. Bitcoin is a technology innovation. It fits in with American innovation. China is a manufacturing state that replicates ideas cheaper.

Bitcoin is and should be lead by the US. The fact that US regulators have accepted it and the government hasn't opposed it, is the most bullish news in the history of bitcoin. Lets get China away from bitcoin and move on to better days ahead.

Agreed.

I'm just one of these little day traders trying to figure out WTF is going on, and what news might come out regarding Chinese exchanges (and accordingly what weight people will give it).

The last posts say it all. Btc value is being held up on hope btcchina will find a way out of it's dilemma, and if not the btcchina closing will not hurt the value too bad. It's denial on both accounts, the only question is how far the value will sink before it starts climbing again without btcchina - that's where I want to buy.

They just pushed out some new secure wallet service to attract coin savings, this proved that they are quickly running out of coins due to bitcoin withdraw pressure ::)

Same goes for cny. And cny production is greater than Btc.

The rich guys already have heaps of cny and apartments.

No need for getting personal. This is a speculation thread. My opinion is as valid as yours. OTOH I'm not hostile to your views. I don't see why you should be hostile to mine. It's called a discussion. Chillax a little bro.

Btw, I'm not bullish on china. I just think that the selling pressure has probably moderated. I don't think we are going to see china push btcs up from here. I do see the big guys in china with the real mullah holding however.

I see growth in the ROW. See: www.bitcoinpulse.com.  A 7% weekly growth rate in wallets imply a doubling of wallets in ten weeks. I don't see that kind of growth in any other sector on planet earth.

In the short term, I agree that there is selling pressure. I can see why you might be agitated by my comments. You are short term. I'm not.

You are worried about day to day or even hourly moves. I'm more like the next few weeks or months.

BTW, I have never come across a really wealthy day trader. The guys that are rich are insiders, macro guys, the buy and hold guys and hedge fund guys. Don't get me wrong, some day traders do well, but on the whole they survive. They aren't really wealthy. This is just my observation generally and is the reason why I chose not to day trade.

Where did their money come from to begin with? If I had money, I wouldn't be day trading.

If I got in at $1, I'd be holding. I got in during the April crash and am up ~ 16000% since. You must admit, BTC/USD and altcoins are much easier to day trade than other markets. What pisses me off sometimes about the anti-trading crowd here is that many of them are comfortable with their BTC holdings. Those of us who entered much later are not. I am young and live pretty much paycheck to paycheck, so I never, ever could have gotten anywhere near where I am in terms of accumulation if not for trading.

Huh? All I did was bold the phrase that was being ignored. The bullish perspectives I was referring took no effort to relate to the situation of Chinese investors -- only repeated the longstanding long term bull position espoused by many here. I don't see why you would take this as hostility.

I'm sorry you live pay check to pay check. Overall, you could still be hurting your future profits by eating your current profits.

From the perspective of a weekly compound rate of 7% in wallet growth. I'm holding at least ten weeks for wallets to double.

One of the reasons why I think the little guys have already converted is because they believe the CCP will ban cny conversions. These guys have already acted.

Why would the remainder stay? To understand you have to see the world through the eyes with the big bucks, have foreign accounts and are running export businesses.

Imagine you are friedcat. Would you convert to useless cny? I think not. You need some to pay rent, wages and  electricity. But the rest of it you want in btcs. Why? Tax free and easily moveable offshore if the proverbial hits the fan. Plus Btcs are likely to appreciate given current wallet growth rate. Same logic applies to other chinese exporters.

I have come across several wealthy traders in my life (energy traders, FOREX traders, bond traders, etc...). Traders are needed in order to provide liquidity to the market and for price discovery. Not everyone can be a "buy and hold" type person or there would be no liquidity in the market. If bitcoin ever becomes mainstream, there will actually be MORE traders than there are now since investment banks & hedge funds will have teams trading bitcoin on the open market. Not to mention there will be a robust bitcoin derivatives market as well.

This should be obvious to anyone with half a brain.

Also, if you are buying during a crash and then holding that is probably a buy and hold. Trading after the crash may be hurting your overall position. Just my two cents.  :)

Nice. And I'm taking the bait. All those guys trading are living pay check to pay check. The guys that are making the real money setup the system that tells them how to trade.

The wealthy guys are buffet, soros, chanos, Paulson, ackman etc... They pay day traders to execute their strategies.

That much is obvious to my little half brain.  Maybe I can learn from you.

So i have come across some dude thats rich because of hitting jackpot at casino, that means i should go to casino every day? dream big right?

Apparently, you dont even have half a brain.  ::)

Eventually I would get run over, which is why this is not sustainable for me long term. I've told myself a few times, these are the last times I will day trade against fiat. But some of these broad movements were predictable enough, and I see no reason, while this market has such little liquidity and no good leverage trading platforms, to not take advantage. I am not overly risky with my strategy.

I don't know enough about the demographic and mindset of the average Chinese investor to comment on these things, really. As for big money, why not other assets? Is BTC not still highly speculative? Does government action matter not? I can't say this sounds particularly convincing to me -- sure, for some, but this all seems very, very speculative.

Living paycheck to paycheck. LOL!!!!

You are just mad about the volatility. Traders are here to stay. I repeat again in case you don't understand: THERE ARE ONLY GOING TO MORE TRADERS IN THE FUTURE NOT LESS.

If you're trading to accumulate more bitcoins, day trading is not a safe way. There is no such thing as predictable market, especially when there are market movers. You can read news and predict rational behavior which does not help you crap for predicting market movers action.

If your goal is to get as many bitcoins as you can now then buy in at near bottom of a crash. Dont sell with the hope to buy back lower.... This is much less risky and your bitcoin stash will keep growing. Its all about future gains.

Kid, capitalized letter doesnt mean your words are more creditable.

Noone would argue there will be less day traders. Every body know games against odds are losing games, yet more ppl go to Casino everyday.

Got that?

Its no longer the case. Big guys use Algotrading.

Everytime i hear of day traders, i think ...."unemployed" champ. Yes since they can have live data feed and trade on computers, kids think they can gamble the market and make money. Then they start reading about trading, going to seminars that teach them "how to get rich - its so easy even your gramma can do it".  ::)

You must not even have half a brain because everything is traded. Commodities, energy, stocks, bonds, currencies, etc... Trading is an essential part of any market.

The reason for the massive volatility in bitcoin right now is because it is still a relatively illiquid market. Also, trading platforms have not matured to the level that more sophisticated trading is possible. Trading is not gambling if you can hedge you trades in a derivatives/options market. Right now bitcoin is too new to take advantage of good hedging, but that doesn't mean that it will never be. If adoption rates increase, then the volatility will decrease and trading will be less risky.

However, trading is here to stay.

Wait so you spin day traders to trading in general ? awesome   ::)

Algotrading still needs human involvement. Hell, there is "algotrading" going on right now in the bitcoin market with bots.

Who else is going to trade right now??? The banks sure as hell aren't touching bitcoin yet.

If the big guys wanted out, btcs would already be trading at less than $200 IMHO. AFAIK, there are no other viable investment assets in china. Btc is highly spec from the POV of regulation. The second worst case scenario has already happened in china. Other countries are unlikely to follow IMHO.

I do see a use case for btcs from the POV of exporters, people with foreign accounts and the rich who want to get money out of china. From this viewpoint, I'm happy to hold long term. In the short term, I'm afraid volatility rules the day.

FTFY I fucking love daytrading. I live for crash days!

https://i.imgur.com/pZJ0rqv.png