Sorry, I mean't nobody with coins on Chinese exchanges can dump them on Western exchanges anymore. Those coins on Chinese exchanges are locked out of the worldwide market. They are similar to the coins on Gox before it closed. People are only prepared to buy them at bigger and bigger discounts because they are trapped on an exchange.
Gotcha. This is something my Bitcoin buddies IRL have discussed since the withdrawal freeze.
If all those coins are trapped in China and demand continues to grow in the rest of the world, what will that do to prices?
To me, considerations like this are more meaningful than mere "technical" analysis.
I've been thinking about the same thing. Not sure if it's right, but this is what I came to. I think we've got two key drivers:
1. The percent chance the market believes funds will be made wholly available no later than March 15th. (depressive force)
2. The opportunity cost of not having access to one's coins for this span of time. (depressive force)
This first point is one that isn't a factor...until it is. As long as there is faith/trust that things will open on time, this factor will be close to zero. If/once is becomes non-zero, it could grow quickly.
We watched this play out on Gox. While elsewhere coins had a market value of $413, IIRC...we watched the price gap between GoxBux and other coins spread...$20, $30..$50 spread. As fear gripped the market in the final hours, price plummeted to just above $100 - over a 75% discount of 'real' coins.
To the second, this won't affect the long term HODLers. But those looking for the short term profits, I suspect, will become increasingly pressured to sell 'while the price is still good'. Those most afraid this 1000+ price point is temporary will feel increasing pressure to sell out of fear.
In the end, it always comes down to fear and greed.
If internationally, we saw prices diverging, and going up...then I think greed would take over, and risk-tolerant investors would inject cash into the chinese exchanges in order to buy 'cheap coins', knowing they will be inaccessible for up to a month, and knowing they run a risk of not getting what they put in. The extent we see this will be visible by buying volume on exchanges, and would counteract both of the above, depressive forces.
...however, with the ETF decision looming, I don't think we'll see such price divergence, but rather sideways action until the decision.
Poll
