Bitcoin Forum

With the deadline for the Chinese Bitcoin exchanges to be cut off from their bank accounts upon us as of today (Tuesday), the Bitcoin price is rising.

Wait, what?

bitcoin priceAs counterintuitive as it might seem, the CoinDesk Bitcoin Price Index is up about 10% today to about $500, although Bitcoin prices rose as high as $514.72.

At $500, the Bitcoin price is up a startling 40% from the low of $355 hit on Friday when several Chinese Bitcoin exchanges received notices from their banks that their accounts would be closed.

Even the Chinese are buying again, with the Bitcoin price in yuan up about 8.4% today to 3,125 yuan – up about 38% from its lows on Friday.

Bitcoin prices plunged last week on concerns that the People’s Bank of China (PBOC) was quietly telling Chinese banks to sever ties with the exchanges by April 15 and that eventually it might even ban the digital currency.

But those fears were not realized.

For one thing, not every Bitcoin exchange has received a notice that its bank accounts would be closed, even though the deadline was today.

That includes the biggest Chinese exchange, BTC China.

“Our situation hasn’t changed. We’ve been talking to banks, the ones we have personal relationships with, and so far we’ve not received any notice to close our business with them,” BTC China Chief Executive Officer Bobby Lee told CoinDesk.

And just hours after the reports from the Chinese exchanges getting notices from their banks appeared Friday, the governor of the PBOC, Zhou Xiaochuan, made these surprising remarks at a regional economic conference:

“It is out of the question of banning Bitcoin as it is not started by central bank,” Xiaochuan said. “Bitcoin is more a kind of tradable and collectible asset, such as stamps rather than a payment currency.”

While not an official statement from the PBOC, the remarks eased the worst concerns about the central bank’s intentions.

And it started the rally in the price of Bitcoin in both yuan and dollars that picked up even more steam today as several of the Chinese exchanges were able to continue doing business unhindered.

But with no official policy statements forthcoming, the events of the past several days still leaves a cloud of uncertainty hanging over Bitcoin in China.

Here’s why that’s probably not going to change for a while…

The Bitcoin Price Remains at the Mercy of the Chinese Government

It’s obvious that Chinese officials aren’t quite sure how to deal with Bitcoin, but you can’t blame them.

Government regulators and central banks the world over are all struggling with Bitcoin, trying to figure out whether it’s a commodity or a currency, and how to tax it.

The sudden rise in the popularity of Bitcoin in China last fall no doubt startled and concerned Chinese officials, who were already dealing with headaches such as an overheated real estate market and concerns over an erupting credit crisis.

When ordinary Chinese started pouring yuan into an unproven digital currency, it’s not hard to see why the government wanted to slam on the brakes. That’s why the PBOC in December told merchants they could not accept Bitcoin as payment and told banks they could not convert Bitcoin to yuan.

Those moves succeeded in cooling the ardor for Bitcoin in China and knocked the Bitcoin price from its highs of over $1,100.

While it’s always hard to read what Chinese authorities might be thinking, it looks like the seemingly erratic moves on Bitcoin over the past several months are simply the PBOC’s way of buying time until it can figure out exactly what it wants to do.

The central bank was unhappy with what it saw as a speculative bubble last fall, but did only what it saw necessary to prick it. Since then the PBOC appears content to let some Chinese dabble in Bitcoin as a hobby.

One thing’s for sure: If the PBOC wanted to ban Bitcoin, it would have done so long ago. That it has resisted doing so hints that the central bank probably recognizes the digital currency’s powerful potential to revolutionize the nature of money itself and does not want China to be left behind.

However, until the Chinese authorities can sort out what exactly how they want to treat Bitcoin, we’re going to see a lot more policy fits and starts. And that’s going to be just one more ingredient adding to the volatility in the price of Bitcoin.

Bitcoin prices have recovered somewhat to $500, but that’s less than half its highs of last year. Some think the Bitcoin price will eventually get to $10,000 or even $1 million. What do you think? Let us know on Twitter @moneymorning or Facebook using #bitcoinnews.

Some in the mainstream media would have you believe that most of those investing in Bitcoin are naïve and unsophisticated fools who don’t recognize a bubble when they see one. But that doesn’t explain why some big names in venture capital are pouring millions of dollars into the digital currency, or why Wall Street is growing increasingly interested. Check Out Who’s Investing in Bitcoin Now

Related Articles:

CoinDesk:
China’s Central Bank Governor: PBOC Won’t Ban Bitcoin
CoinDesk:
PBOC Deadline Day: Business as Usual for BTC China

The post Why the Bitcoin Price Is Rising Today appeared first on Money Morning – Only the News You Can Profit From.

 “Bitcoin is more a kind of tradable and collectible asset, such as stamps rather than a payment currency.”

That is the only reason right now of why the prices are up. since bitcoin is an asset then it will go up and down with the market (check dow, S&P index)

Another thing is: the announcement of the headquarter for BitCoin in Virginia

https://coinreport.net/bitcoin-shop-new-headquarters-virginia/

So simple terms, its the chinese?

No. It has nothing to do with the Chinese. Amazon yesterday revealed that they actually considered Bitcoin as  a payment option, but temporarily rejected it after studying.

Because nothing can stop btc.

I don think just amazon are studying , every business are studying bitcoin and start to accept it .

You mean the reason why bitcoin is going up is because amazon considered bitcoin as a payment method? really? China didn't ban bitcoins, that could be a reason..

The rise at the moment is definitely because of the chinese business being left behind us, and the future larger rises are going to primarily be because of more businesses studying bitcoins and finding ways to accept them as a payment method.

China doesn't know what they're doing. Ban / not ban / ban / not ban etc. we just have to give them some time.

What are you talking about? They've already clearly stated that they're not banning bitcoins, due to them not seeing it as a currency, but rather a collectable item. However the banks aren't allowed to trade with them, which they aren't with any other 'item'.

Some people spread FUD.
Some panic-sellers don't know what they are doing.

And in the end hodlers are gonna win bigtime. :) Let the people who are in it to get rich quick panic sell.

it goes back to 1200

It will go back to 1200, maybe in a few months ;)

Please go somewhere else to get your post count up… I don't see the point of that post. It's not grammatically correct, and it contributes nothing to the thread.

Good news. I hope it goes back to 700

We'll probably need something to happen for this to happen, in the meantime you could try to contribute to making Amazon accept bitcoins by emailing them. Check the thread about it if you wanna help. :)