If the Chinese really are using Bitcoin to get money out of the country, could that not explain the wild swings that have been happening in the last few days?
I imagine that some buys a few million USD worth of Bitcoin on a Chinese exchange. They then transfer them to a US or European exchange, and cash out to a USD or Euro denominated bank account. That would move the market sharply in both directions.
If the Chinese really are getting money out of China using Bitcoin, they can't be holding the Bitcoin, as the market cap isn't high enough, so they must be selling too.
You are right on both counts.
To further elaborate
1. Chinese has been getting money out of the country for a long time You see, the average Chinese have strong faith in USD, but the swing has been exacerbated because the authorities had a coffee session with the three major exchanges. And this is a sign of tightening bitcoins control, hence the selloff.
2. You are right, 12 million bitcoin is worth 12 billion USD not including lost coins which some says is >50%. So that's only 5 billion which pales in comparison with 3 trillion USD FX reserces they have (I know it's apple and oranges). So they can't be only holding bitcoin, many are selling and buying and selling. Classic demand and supply
