Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[JayJuanGee]

Also wasnt there some defiant statements from Huobi about NOT complying with china regulations or that trades are going to take place underground if china keeps pushing for banning or too many restrictions on bitcoin, and that seems to just drag things out more than resolving matters.

As far as I can tell with Google Translate, the note  now on their site  (dated 2014-04-11 16:45:16 local time) says that

(1) they believe that the aim of the December decree was to prevent abuses like money laundering, and they are totally willing to cooperate with the government on that, they are already doing a lot in that area with customer identification, reporting large movements etc; and that if they are forced to shut down, those abuses will move overseas where they will be harder to police;

(2) they have received closure notices from two banks (ICBC and Merchants Bank), they understand that each bank is interpreting the PBoC order differently, with different dates, so perhaps some of the banks may continue to work with them.

I think these views are consistent with the theory that the new "PBoC circular" did not originate with PBoC (which does not seem worried about those "virtual stamps" anymore).  Bitcoin is no longer a threat to the monetary policy, which is the PBoC's main concern.  But is still a potential tool for money laundering, bribing, subversion, etc..

IIRC, the December decree was said to be the joint decision of five ministeries/agencies, of which PBoC was just one.  I think that the March decision, to tighten the December decree by closing the bank accounts, came from the law enforcement and national security agencies, and was issued through the PBoC only because the banks are subordinated to the PBoC.

Also, point (2) above may explain why the price bounced back to the level of Apr/09.  The previous note of Apr/10, about the ICBC closure, implied that all  bank accounts would be closed, with no negotiation possible, thus confirming the Caixin article.  This note restores the uncertainty of last Friday by suggesting that some bank accounts may remain open.  The timing of the last drop (07:00 am local time) and the  bounceback (11:00 am local time) seems consistent with the timing of the note plus insider trading.

Your interpretation seems to make quite a bit of sense to outline what seems to be the current situation, which really does seem to come back to the notion that at least on Huobi, they are going to continue to attempt to operate, and they seem to have a variety of options to continue to operate - however, at any moment their funding avenues could dry up.  Then we get to the next FUD and speculated price drop, again (like ground hog's day) that China is banning bitcoin. 

These kinds of uncertainties could drag out for several months... and in the meantime the bitcoin network will continue to expand.. and maybe by the time bitcoin is really and truly banned in china, it will be too late  - or some other change in bitcoin land may evolve in order that such news is NOT so detrimental to BTC prices?

[ChartBuddy]

Explanation

[JorgeStolfi]

[...] does seem to come back to the notion that at least on Huobi, they are going to continue to attempt to operate, and they seem to have a variety of options to continue to operate - however, at any moment their funding avenues could dry up.  Then we get to the next FUD and speculated price drop, again (like ground hog's day) that China is banning bitcoin.  

These kinds of uncertainties could drag out for several months... and in the meantime the bitcoin network will continue to expand.. and maybe by the time bitcoin is really and truly banned in china, it will be too late  - or some other change in bitcoin land may evolve in order that such news is NOT so detrimental to BTC prices?

Obviosly I can't predict unpredictable events... But if Huobi can keep some bank account open after Apr/18, the price may recover the 500 CNY that it lost on Mar/27 because of the Caixin leak.  However, the descending trend that has dominated since Feb/06 will probably continue.

If, on the other hand, all bank accounts get indeed closed next week, the price will probably drop by at least another 500 CNY, as it did on Apr/10 after the ICBC closure. (Since that drop was cut short by the new Huobi note, such final frop may be much deeper than that.)

[dreamspark]

Cant wait for the next bull run, Jorge your going to have so much fun   

Buy a Bitcoin 

[spooderman]

Been a while since we've seen a double bottom.

Ex:

I've missed you Larry David.

We need to re-visit the 300s just one more time plz. I can't believe how many bear trolls voted in that poll. We're not getting back into the 200s. There's no waaaay.

[ChartBuddy]

Explanation

[ChartBuddy]

Explanation

[spooderman]

6 hrs until it's the 14th in China and a disappointingly little amount of stuff happens.

[minerpumpkin]

350 BTC dumped on Stamp and no one cares! *cheers* 

[ShroomsKit]

350 BTC dumped on Stamp and no one cares! *cheers* 

We'll see. I have the feeling a few people are about to panic.

[aminorex]

the last time I checked,the amortized mining cost of 1 bit coin was 700 dollars using the latest cheapest equipment.   the overwhelming bulk of all coin mining is being done with the latest cheapest equipment, as can be easily inferred from the hash rate graph.

these coins will not be sold for less than $700 I can assure you

That's not really how it works at all. That's basically the sunk cost fallacy and the fallacious labor theory of value merged into one conclusion.

Production costs do not directly cause price. Market price does naturally converge on cost plus a standard economic rate of return given stable demand due to changes in the supply function. But that is not a direct causal relationship to price.

A miner would only rationally hold out for >$700 if he didn't anticipate needing liquidity prior to the expectation of that price arising. The marginal utility of dollars necessarily increases relative to Bitcoin if the miner has a pressing need for dollars.

That was one of the most ludicrous strings of verbiage I have seen since the Sokal/Socialtext affair.  Simple arithmetic refutes you outright.  If I seek anything other than bankruptcy I simply can not sell coins mined today with the most cost-effective hashing hardware in the known universe for less than 700.  If I am not holding my only rational choice is to sell the hardware to someone who will.

[minerpumpkin]

350 BTC dumped on Stamp and no one cares! *cheers* 

We'll see. I have the feeling a few people are about to panic.

Nah, 1 week ago this would have crashed the market out of its "450s tunnel", but now everyone seems to be like "Well, I'm not selling! Let's wait until the train leaves and jump on then."

[TERA]

350 BTC dumped on Stamp and no one cares! *cheers* 

We'll see. I have the feeling a few people are about to panic.

Nah, 1 week ago this would have crashed the market out of its "450s tunnel", but now everyone seems to be like "Well, I'm not selling! Let's wait until the train leaves and jump on then."

The trend is controlled entirely by China.

[ShroomsKit]

350 BTC dumped on Stamp and no one cares! *cheers* 

We'll see. I have the feeling a few people are about to panic.

Nah, 1 week ago this would have crashed the market out of its "450s tunnel", but now everyone seems to be like "Well, I'm not selling! Let's wait until the train leaves and jump on then."

I sure hope you're right. I'm so extremely tired of all these people trying to take us down and the idiot panic sellers helping them every time.

[minerpumpkin]

350 BTC dumped on Stamp and no one cares! *cheers*  

We'll see. I have the feeling a few people are about to panic.

Nah, 1 week ago this would have crashed the market out of its "450s tunnel", but now everyone seems to be like "Well, I'm not selling! Let's wait until the train leaves and jump on then."

I sure hope you're right. I'm so extremely tired of all these people trying to take us down and the idiot panic sellers helping them every time.

We're back at 424. I've got a good feeling. But we'll see. Even the bears conclude that a second test of 340 would send us in bull country, so if that happens... let it be!

edit: Nevermind, back at 420 

[Rampion]

Bitstamp stuff are behaving a little bit strange :

https://twitter.com/Bitstamp/status/454601576007864320




mmmm so Why ? they never did that before !!!

It's highly concerning that apparently Bitstamp is showing willingness to manipulate the market given the role they play., because we don't know if there is any real foul play behind the scenes. MtGox once did the same with a similar statement in a press release. I deemed them somewhat more professional than MtGox, but perhaps I was wrong.

At least MtGox have stated that they would disallow their employees from insider trading, but I have not heard anything like that from Bitstamp.

You can bet your hat there was a huge amount of "insider trading" on Gox, and that currently that's happening on Bitstamp too.

Do not forget people running those service are a bunch of amateurs (at best), which are not compliant with current financial regulations - to operate as an exchange in the EU you need to have a banking license, in most of the US states you need to be registered as a MSB, etc. - Bitstamp is operating with a SINGLE corporate account where they mix all customers funds, and probably their own too. Taking deposits without a banking license is illegal in the EU, and it is also very dangerous for the customers: if ONE Bitstamp customer is investigated the relevant authority will have no other option that to freeze the ONLY bank account Bitstamp has, de facto screwing up all their customers. That wouldn't happen if they were compliant and thus acting as a bank, setting up a separate fiat account for each one of their customers.

From a legal point of view, currently Bitstamp is the sole owner of the corporate account in which customers are depositing their trading funds, which is very bad for their customers and totally non-compliant, as customers are not exchanging their money for a service but DEPOSITING it in order to trade with each other.

You can bet Bitstamp knows this very well, and yet they continue to operate because the risk is worth it - you can bet they are ready to take other kinds of risks too as per "insider trading".

That said, while operating an exchange without a banking license (or a banking partner providing that license as Fidor Bank does for bitcoin.de, which from a legal POV is just a tied agent of Fidor) is illegal/non-compliant in the EU, Bitstamp is not giving a shit about that fact risking all their customer funds to LE or regulators, I bet the apply the same standard for other dangerous practices.

We are still in the wild west, folks... But probably not for too long.

[spooderman]

350 BTC dumped on Stamp and no one cares! *cheers*  

We'll see. I have the feeling a few people are about to panic.

Nah, 1 week ago this would have crashed the market out of its "450s tunnel", but now everyone seems to be like "Well, I'm not selling! Let's wait until the train leaves and jump on then."

I sure hope you're right. I'm so extremely tired of all these people trying to take us down and the idiot panic sellers helping them every time.

We're back at 424. I've got a good feeling. But we'll see. Even the bears conclude that a second test of 340 would send us in bull country, so if that happens... let it be!

edit: Nevermind, back at 420 

Bulls, your time is nao. LET'S GO!

(Or alternatively, hit 350 again for me just once more, I have a little bit of fiat I would rather not have).

[spooderman]

5


(hours until nothing much occurs in China)

[Zule]

the last time I checked,the amortized mining cost of 1 bit coin was 700 dollars using the latest cheapest equipment.   the overwhelming bulk of all coin mining is being done with the latest cheapest equipment, as can be easily inferred from the hash rate graph.

these coins will not be sold for less than $700 I can assure you

That's not really how it works at all. That's basically the sunk cost fallacy and the fallacious labor theory of value merged into one conclusion.

Production costs do not directly cause price. Market price does naturally converge on cost plus a standard economic rate of return given stable demand due to changes in the supply function. But that is not a direct causal relationship to price.

A miner would only rationally hold out for >$700 if he didn't anticipate needing liquidity prior to the expectation of that price arising. The marginal utility of dollars necessarily increases relative to Bitcoin if the miner has a pressing need for dollars.

That was one of the most ludicrous strings of verbiage I have seen since the Sokal/Socialtext affair.  Simple arithmetic refutes you outright.  If I seek anything other than bankruptcy I simply can not sell coins mined today with the most cost-effective hashing hardware in the known universe for less than 700.  If I am not holding my only rational choice is to sell the hardware to someone who will.

Miners sell when they need to, even with a loss. Some of the biggest companies in the word operate with a loss sometime. A miner will keep mining and selling with a loss if he thinks that after a period of time in which he can withstand losses, the luck will change and he can make profit and cover those losses.

[mah87]

Survey about trading tools ! Please vote!

https://bitcointalk.org/index.php?topic=558348

Thank you! =D