"the absence of CNY currency volatility may dampen the price of Bitcoin" -- Arthur Hayes, BitMEX Crypto Trader Digest @BitMEXdotcom
why?
with less chinese volatility people that complain about Bitcoin being manipulated by the chinese may be less afraid and enter the market
or just create another excuse about why bitcoin is a bad investment
As far as I can understand position of Arthur Hayes it is because of the current pure speculative nature of Bitcoin. Here is an excerpt:
"All of a sudden, the PBOC turned on the lights at the club. In response to pressure from regulators, Chinese exchanges ceased offering margin trading on January 11th. The very next day, XBTH17 entered backwardation. Existing loans were allowed to expire, but no new loans could be taken out.
Margin loans had 2 to 30 day terms. As loans expired, credit whales need to unwind their trades. That meant selling futures and buying spot with released CNY. This helped move the futures’ basis into backwardation.
The Fear Uncertainty and Doubt (FUD) surrounding what the PBOC would or wouldn’t do prompted speculators to short Bitcoin via futures. There was no more margin trading therefore futures were the only bearish instrument available. Even today, the PBOC has released no statement as to what policy actions will be undertaken as a result of their “investigations”.
In short:
Margin Book Unwind + FUD = Futures Backwardation"