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Author Topic: If bitcoin bubbles again, Chinese exchanges will have problems  (Read 2566 times)
jehst
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June 01, 2015, 02:15:48 AM
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The Chinese government does not like speculative bubbles. They are currently issuing warnings about the stock market. They are restricting lending. They are telling people not to sell any property to buy stocks. To the Chinese government, speculative bubbles cause chaos and disorder and may ruin people's lives. That in turn threatens the government's position. We saw how the Chinese government began to warn and freeze bank accounts in 2013 when bitcoin was bubbling.

From the point of view of Chinese exchanges, bubbles are a bad thing. If a bubble develops, the government will come back in and start shutting things down.  What if China's top three exchanges made a pact to keep bitcoin from bubbling? They would have nice, calm business for years. This is my conspiracy theory. They can short bitcoin, engaging in stop hunting with phantom coins to take money from heavily leveraged buyers. At the same time, they contain any major rallies so they don't catch heat from their government. At the same time, miners are selling coins everyday anyway, so the default pressure is down.

Only an absolutely enormous bullwhale who keeps buying and withdrawing coins could possibly expose such a plan. And I don't think we have a bullwhale like that.

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June 12, 2015, 12:53:34 PM
 #2

You may well have a point.

From here

http://www.coindesk.com/chinas-bitcoin-exchanges-survived-the-crackdown-battle-aftermath/

'Xu, CEO of OKCoin, is a co-sponsor of the Garage Café meet-up too. During his talk, he made a plea to the audience not to use bitcoin as a speculative vehicle. Xu said:

“If the exchange rate shoots up as crazily as in November, there is a good chance that we will spend this Spring Festival behind bars.”

Hopefully the Chinese exchanges will slowly become an irrelevance as better Western options arrive. Overall I don't think they've done BTC many favours and a country where it can't be used for anything other than speculation and trading isn't going to get it where it deserves to be.

So we have persistent rumours of fake volumes, astounding unprofessionalism such as the Roger Ver contract drama and a publicly stated and very powerful incentive to not let the price spiral upwards.

That's disregarding the general climate of doing business in China which is a shower of shit in terms of transparency at the best of times.

It's a rather persuasive case.

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June 12, 2015, 12:57:42 PM
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You may well have a point.

From here

http://www.coindesk.com/chinas-bitcoin-exchanges-survived-the-crackdown-battle-aftermath/

'Xu, CEO of OKCoin, is a co-sponsor of the Garage Café meet-up too. During his talk, he made a plea to the audience not to use bitcoin as a speculative vehicle. Xu said:

“If the exchange rate shoots up as crazily as in November, there is a good chance that we will spend this Spring Festival behind bars.”

Hopefully the Chinese exchanges will slowly become an irrelevance as better Western options arrive. Overall I don't think they've done BTC many favours and a country where it can't be used for anything other than speculation and trading isn't going to get it where it deserves to be.



I totally agree with what you said  Grin
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June 12, 2015, 01:55:46 PM
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If the bubble arises, I don't think it will come from China! Chinese gov has implemented a lot of measures to tackle the speculative issues, like deposit and withdrawal limit, unable direct transferring money to exchanges etc! Then the bubble is effectively contained later!

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June 12, 2015, 02:11:35 PM
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If the bubble arises, I don't think it will come from China! Chinese gov has implemented a lot of measures to tackle the speculative issues, like deposit and withdrawal limit, unable direct transferring money to exchanges etc! Then the bubble is effectively contained later!

I don't know where the bubble will come from. I only know that the Chinese government will not be happy to see it.

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June 12, 2015, 02:18:15 PM
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When the next bubble comes, no only the Chinese will involve but also the ppl from western! Chinese will have no ability to control it! So is the Chinese exchanges! IMO they wouldn't have the ability to contain the rallies and wouldn't take the risk of shorting bitcoin!

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June 12, 2015, 02:23:18 PM
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TIL Chinese government care about its people.

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June 12, 2015, 02:25:50 PM
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A slow gradual climb is more healthy anyway.

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June 12, 2015, 03:51:08 PM
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A slow gradual climb is more healthy anyway.

Yeah it'd be nice if we took the first step on the ladder any day now, even 300 seems like so far away.
Something has to change soon, I bet there are some bull whales getting itchy trigger fingers at the moment, the current price range is doing nothing for anybody.

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June 12, 2015, 05:24:36 PM
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If the Chinese can stop another bubble from happening, I'm all for it. Bubbles always hurt the underlying economy and benefit only a lucky few. The OP sounds like he thinks that the idea of stopping a bubble is something to worry about, but I disagree. Stability is better for Bitcoin and the underlying economy.

With that said, I seriously that three Chinese exchanges can control the market to that extreme. I hope I'm wrong. Bubbles are never good because they always burst.

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June 12, 2015, 05:30:10 PM
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If the Chinese can stop another bubble from happening, I'm all for it. Bubbles always hurt the underlying economy and benefit only a lucky few. The OP sounds like he thinks that the idea of stopping a bubble is something to worry about, but I disagree. Stability is better for Bitcoin and the underlying economy.

With that said, I seriously that three Chinese exchanges can control the market to that extreme. I hope I'm wrong. Bubbles are never good because they always burst.

I agree 100 percent. In Bitcoin, we have bubbles where Altcoins have pump-and-dumps. The underlying cause is different, but the result is the same.

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June 12, 2015, 05:46:21 PM
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If the Chinese can stop another bubble from happening, I'm all for it. Bubbles always hurt the underlying economy and benefit only a lucky few. The OP sounds like he thinks that the idea of stopping a bubble is something to worry about, but I disagree. Stability is better for Bitcoin and the underlying economy.

With that said, I seriously that three Chinese exchanges can control the market to that extreme. I hope I'm wrong. Bubbles are never good because they always burst.

We will have "bubbles" until we reach the point of relative stability. There's no getting to stability without them. It's part of the necessary growth pattern.
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June 12, 2015, 05:50:05 PM
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If the Chinese can stop another bubble from happening, I'm all for it. Bubbles always hurt the underlying economy and benefit only a lucky few. The OP sounds like he thinks that the idea of stopping a bubble is something to worry about, but I disagree. Stability is better for Bitcoin and the underlying economy.

With that said, I seriously that three Chinese exchanges can control the market to that extreme. I hope I'm wrong. Bubbles are never good because they always burst.

They're hard things to avoid when everything is so tiny. Human psychology doesn't often allow the slow, steady climb. Our little monkey brains are tuned to panic in both directions. When machines are the primary buyers we might see a different approach.

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June 12, 2015, 10:51:41 PM
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If the Chinese can stop another bubble from happening, I'm all for it. Bubbles always hurt the underlying economy and benefit only a lucky few. The OP sounds like he thinks that the idea of stopping a bubble is something to worry about, but I disagree. Stability is better for Bitcoin and the underlying economy.

With that said, I seriously that three Chinese exchanges can control the market to that extreme. I hope I'm wrong. Bubbles are never good because they always burst.

I agree 100 percent. In Bitcoin, we have bubbles where Altcoins have pump-and-dumps. The underlying cause is different, but the result is the same.

if there were no bubbles at all, there would be far less investors investing in bitcoin. bubbles attract people, if there is no money to be made, then there wouldn't be as much people here.
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June 12, 2015, 10:55:33 PM
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the chinese exchanges are the biggers traders already they like have plenty control and can affect others exchanges i doubt they will have problems... they keep selling and buying bitcoins as looks like they were just making a easy thing:smiley
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June 13, 2015, 03:55:25 AM
 #16

I think that is quite possible for the exchangers to keep the bubbles afloat. As long as there are speculative funds coming in to buy bitcoins, they can continue to sell and counter balance the amount of funds between the in and out. Not sure how long this can go on while I see government measure generally are just restrictive but doesn't mean that it is completely fool proof.

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June 13, 2015, 04:23:39 AM
 #17

The Chinese government does not like speculative bubbles. They are currently issuing warnings about the stock market. They are restricting lending. They are telling people not to sell any property to buy stocks. To the Chinese government, speculative bubbles cause chaos and disorder and may ruin people's lives. That in turn threatens the government's position. We saw how the Chinese government began to warn and freeze bank accounts in 2013 when bitcoin was bubbling.

From the point of view of Chinese exchanges, bubbles are a bad thing. If a bubble develops, the government will come back in and start shutting things down.  What if China's top three exchanges made a pact to keep bitcoin from bubbling? They would have nice, calm business for years. This is my conspiracy theory. They can short bitcoin, engaging in stop hunting with phantom coins to take money from heavily leveraged buyers. At the same time, they contain any major rallies so they don't catch heat from their government. At the same time, miners are selling coins everyday anyway, so the default pressure is down.

Only an absolutely enormous bullwhale who keeps buying and withdrawing coins could possibly expose such a plan. And I don't think we have a bullwhale like that.

In what way exactly would they do that? They cant influence every world exchange, so if they are presenting false data, they would have to pay up every cashout difference from their own pocket..
The more viable solution would be to report accounts that are buying large amounts of bitcoins to their govenment, which could then find a way to "legaly" remove such a trader.
In any way, i don't see this theory as plausible.

I have made a suggestion some time back on how they could influence the market by holding on or selling off the fee's from trades, but that is also not enough to stop a true bubble from happening,
even tho even the daily fee's are not negligible, especialy if it is a coordinated action from more exchanges together.

cheers
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June 13, 2015, 04:26:08 AM
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The Chinese government does not like speculative bubbles. They are currently issuing warnings about the stock market. They are restricting lending. They are telling people not to sell any property to buy stocks. To the Chinese government, speculative bubbles cause chaos and disorder and may ruin people's lives. That in turn threatens the government's position. We saw how the Chinese government began to warn and freeze bank accounts in 2013 when bitcoin was bubbling.

From the point of view of Chinese exchanges, bubbles are a bad thing. If a bubble develops, the government will come back in and start shutting things down.  What if China's top three exchanges made a pact to keep bitcoin from bubbling? They would have nice, calm business for years. This is my conspiracy theory. They can short bitcoin, engaging in stop hunting with phantom coins to take money from heavily leveraged buyers. At the same time, they contain any major rallies so they don't catch heat from their government. At the same time, miners are selling coins everyday anyway, so the default pressure is down.

Only an absolutely enormous bullwhale who keeps buying and withdrawing coins could possibly expose such a plan. And I don't think we have a bullwhale like that.

In what way exactly would they do that? They cant influence every world exchange, so if they are presenting false data, they would have to pay up every cashout difference from their own pocket..
The more viable solution would be to report accounts that are buying large amounts of bitcoins to their govenment, which could then find a way to "legaly" remove such a trader.
In any way, i don't see this theory as plausible.

I have made a suggestion some time back on how they could influence the market by holding on or selling off the fee's from trades, but that is also not enough to stop a true bubble from happening,
even tho even the daily fee's are not negligible, especialy if it is a coordinated action from more exchanges together.

cheers

Heavy shorting into rallies using their own customers' funds. A bubbling was beginning to form in May/June 2014 and it looks like it was stomped out.

Year 2021
Bitcoin Supply: ~90% mined
Supply Inflation: <1.8%
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June 13, 2015, 05:33:59 AM
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The Chinese government does not like speculative bubbles. They are currently issuing warnings about the stock market. They are restricting lending. They are telling people not to sell any property to buy stocks. To the Chinese government, speculative bubbles cause chaos and disorder and may ruin people's lives. That in turn threatens the government's position. We saw how the Chinese government began to warn and freeze bank accounts in 2013 when bitcoin was bubbling.

From the point of view of Chinese exchanges, bubbles are a bad thing. If a bubble develops, the government will come back in and start shutting things down.  What if China's top three exchanges made a pact to keep bitcoin from bubbling? They would have nice, calm business for years. This is my conspiracy theory. They can short bitcoin, engaging in stop hunting with phantom coins to take money from heavily leveraged buyers. At the same time, they contain any major rallies so they don't catch heat from their government. At the same time, miners are selling coins everyday anyway, so the default pressure is down.

Only an absolutely enormous bullwhale who keeps buying and withdrawing coins could possibly expose such a plan. And I don't think we have a bullwhale like that.

In what way exactly would they do that? They cant influence every world exchange, so if they are presenting false data, they would have to pay up every cashout difference from their own pocket..
The more viable solution would be to report accounts that are buying large amounts of bitcoins to their govenment, which could then find a way to "legaly" remove such a trader.
In any way, i don't see this theory as plausible.

I have made a suggestion some time back on how they could influence the market by holding on or selling off the fee's from trades, but that is also not enough to stop a true bubble from happening,
even tho even the daily fee's are not negligible, especialy if it is a coordinated action from more exchanges together.

cheers

Heavy shorting into rallies using their own customers' funds. A bubbling was beginning to form in May/June 2014 and it looks like it was stomped out.

OK, i understand that, but if the rally is big enough, it's just a matter of time when they would be left without funds to cover withdrawals, and what then?
Claim to be hacked like gox did ?

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June 13, 2015, 05:40:45 AM
 #20

The Chinese government does not like speculative bubbles. They are currently issuing warnings about the stock market. They are restricting lending. They are telling people not to sell any property to buy stocks. To the Chinese government, speculative bubbles cause chaos and disorder and may ruin people's lives. That in turn threatens the government's position. We saw how the Chinese government began to warn and freeze bank accounts in 2013 when bitcoin was bubbling.

From the point of view of Chinese exchanges, bubbles are a bad thing. If a bubble develops, the government will come back in and start shutting things down.  What if China's top three exchanges made a pact to keep bitcoin from bubbling? They would have nice, calm business for years. This is my conspiracy theory. They can short bitcoin, engaging in stop hunting with phantom coins to take money from heavily leveraged buyers. At the same time, they contain any major rallies so they don't catch heat from their government. At the same time, miners are selling coins everyday anyway, so the default pressure is down.

Only an absolutely enormous bullwhale who keeps buying and withdrawing coins could possibly expose such a plan. And I don't think we have a bullwhale like that.

In what way exactly would they do that? They cant influence every world exchange, so if they are presenting false data, they would have to pay up every cashout difference from their own pocket..
The more viable solution would be to report accounts that are buying large amounts of bitcoins to their govenment, which could then find a way to "legaly" remove such a trader.
In any way, i don't see this theory as plausible.

I have made a suggestion some time back on how they could influence the market by holding on or selling off the fee's from trades, but that is also not enough to stop a true bubble from happening,
even tho even the daily fee's are not negligible, especialy if it is a coordinated action from more exchanges together.

cheers

Heavy shorting into rallies using their own customers' funds. A bubbling was beginning to form in May/June 2014 and it looks like it was stomped out.

OK, i understand that, but if the rally is big enough, it's just a matter of time when they would be left without funds to cover withdrawals, and what then?
Claim to be hacked like gox did ?



Say that they are reducing withdrawal limits because the price is high for security reasons. Then use all the money they have and can borrow to sell and try to pop the bubble. New money will be coming in quickly during a bubble.


Year 2021
Bitcoin Supply: ~90% mined
Supply Inflation: <1.8%
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