Reason for Today's Crash: China Bans Bitcoin Payment Processors

[TheJacob]

This is further clarified in the article:

People will still be able to withdraw their money from Chinese exchanges, they just won’t be able to deposit new funds. - You can only sell Bitcoins on exchange and withdraw Fiat, but not deposit Fiat to buy coins.

People will still be able to sell their bitcoins for local currency and then withdraw that currency

If true, I guess this is better than exchanges not being able to operate at all, but having to deposit in BTC prevents new people from coming in and obtaining bitcoins. Also, this doesn't bode well for what might happen in the future.

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[kireinaha]

I remember only a week ago when all the bulls on here were patronizing everyone who sold their bitcoins based off the China news as sheeple who didn't understand what was happening and irrationally panic sold. Well, I guess those people had pretty good foresight afterall. 

[apetersson]

i don't quite get it. how is an exchange supposed to happen if funds cannot flow in + out?

i feel we are missing some important information here. the previous releases did not sound like they want to ban exchanges..

[crazy_rabbit]

i don't quite get it. how is an exchange supposed to happen if funds cannot flow in + out?

i feel we are missing some important information here. the previous releases did not sound like they want to ban exchanges..

They aren't banning exchanges. That's the PR beauty of it. It's like a knife in the voodooo doll that kills you anyway.

[terman45x]

If no more money cannot go in, owning Bitcoin for Chinese must be extremly valuable, the price will go much higher in China, Bitcoins can be used to move wealth out of China

[WompRat]

I would suggest having some perspective and stop contributing to volatility that puts traders off adopting Bitcoin, but I guess I would be pissing in the wind right? Obviously the actions in any one country matters to an International payment system and I'm an idiot.

It's the time of the year when most financial magazines and websites round up how well their stock picks have done and congratulating themselves on beating the trackers or maybe even getting over 20% growth on their portfolio over the year. Personally I am not ditching something that has outperformed everything else I hold by a huge margin and has the potential to do so again next year.

[crazy_rabbit]

If no more money cannot go in, owning Bitcoin for Chinese must be extremly valuable, the price will go much higher in China, Bitcoins can be used to move wealth out of China

That's a pretty positive spin on it actually. But it essentially makes it useful for black market transactions again, which has value....but I thought we were past courting the black market.

[GigaCoin]

i don't quite get it. how is an exchange supposed to happen if funds cannot flow in + out?

i feel we are missing some important information here. the previous releases did not sound like they want to ban exchanges..

started with the banks, now the payment processors.

[piramida]

If no more money cannot go in, owning Bitcoin for Chinese must be extremly valuable, the price will go much higher in China, Bitcoins can be used to move wealth out of China

Yep, I guess a huge black market will emerge. In either case, it would be an interesting and long awaited confrontation between government and bitcoin. And bitcoin will win this, what remains to be seen is how fast.

[emanymton]

If no more money cannot go in, owning Bitcoin for Chinese must be extremly valuable, the price will go much higher in China, Bitcoins can be used to move wealth out of China

That's a pretty positive spin on it actually. But it essentially makes it useful for black market transactions again, which has value....but I thought we were past courting the black market.

We'll never fully get away from our roots, just like cash 

[MonadTran]

So chinese are getting f in the a. I guess now they will see that unless they actually *own* their money they will be told what they can or can't do with it, like little children. Seems very bullish to me... After the panic dissipates in a week or two. Meanwhile, cheap coins.

Not sure if it's bullish for Bitcoin, but I feel it's kinda bearish for the Chinese economy. I was considering other ways to protect my savings, apart from Bitcoin, well... Today I made a decision that Chinese stocks are not going to be a part of my portfolio.

[kireinaha]

If no more money cannot go in, owning Bitcoin for Chinese must be extremly valuable, the price will go much higher in China, Bitcoins can be used to move wealth out of China

Yep, I guess a huge black market will emerge. In either case, it would be an interesting and long awaited confrontation between government and bitcoin. And bitcoin will win this, what remains to be seen is how fast.

But at what point is it all going to be too much trouble to deal with? Those who still own bitcoin in China can use them as a store of value, but given the level of regulation, it might be easier at this point to make a trip to Macau for poker chips or another alternative, like precious metals or something. It's really hanging by a thread.

[mvdheuvel1983]

If no more money cannot go in, owning Bitcoin for Chinese must be extremly valuable, the price will go much higher in China, Bitcoins can be used to move wealth out of China

Yeah, that's what we are seeing now 

[piramida]

Yeah, that's what we are seeing now 

what we are seeing now is called panic when herd panics (either direction), rational thinking is turned off.

[Peter R]

Assuming it's true* that you can withdraw but not deposit to BTCChina, then why would a rational individual withdraw?  Whenever you have a one-way financial valve like this, it makes the less-restrictive money (money in BTCChina) worth more. 

I can understand selling in the panic to buy back later, but Yuan in BTCChina--if the rumour is true--is now better than Yuan in a bank account. 

*I can't see this actually being true

[GigaCoin]

Assuming it's true* that you can withdraw but not deposit to BTCChina, then why would a rational individual withdraw?  Whenever you have a one-way financial valve like this, it makes the less-restrictive money (money in BTCChina) worth more. 

I can understand selling in the panic to buy back later, but Yuan in BTCChina--if the rumour is true--is now better than Yuan in a bank account. 

*I can't see this actually being true

it also means no new Yuan will be coming to Chinese exchanges, which is a huge blow for them.

[raskolnikovx]

I am sick and tired of this "nobody knows what chinese do" thingy.
Fuck them all

[cAPSLOCK]

i don't quite get it. how is an exchange supposed to happen if funds cannot flow in + out?

i feel we are missing some important information here. the previous releases did not sound like they want to ban exchanges..

I think your missing important information is China is essentially a communist capital state.  They never have had the freedoms most westerners are concerned about losing.  We complain about the fed.  Their economic power is tightly held by the government.

This is no surprise.

The surprise for the Chinese gvmt in the end will be the fact the you cannot stop bitcoin trade.

But for now?  Look out below.  BTC technicals have been bad for a while.  This news is gas on embers.

[GigaCoin]

i don't quite get it. how is an exchange supposed to happen if funds cannot flow in + out?

i feel we are missing some important information here. the previous releases did not sound like they want to ban exchanges..

I think your missing important information is China is essentially a communist capital state.  They never have had the freedoms most westerners are concerned about losing.  We complain about the fed.  Their economic power is tightly held by the government.

This is no surprise.

The surprise for the Chinese gvmt in the end will be the fact the you cannot stop bitcoin trade.

But for now?  Look out below.  BTC technicals have been bad for a while.  This news is gas on embers.

Chinese who didn't catch the news early wake up in a few hours, maybe another sell off.

[cAPSLOCK]

i don't quite get it. how is an exchange supposed to happen if funds cannot flow in + out?

i feel we are missing some important information here. the previous releases did not sound like they want to ban exchanges..

I think your missing important information is China is essentially a communist capital state.  They never have had the freedoms most westerners are concerned about losing.  We complain about the fed.  Their economic power is tightly held by the government.

This is no surprise.

The surprise for the Chinese gvmt in the end will be the fact the you cannot stop bitcoin trade.

But for now?  Look out below.  BTC technicals have been bad for a while.  This news is gas on embers.

Chinese who didn't catch the news early wake up in a few hours, maybe another sell off.

Hmm.  Not maybe IMHO. ☺☺

But the real good news is this just helps what is a needed retraction in price to speed up.

The west has a chance to lead in financial freedom here.  But we need to see the us continue to back off from interfering with exchanges.

We need gentle regulation.  Asap.  And then see US exchanges gain steam.  I believe this is true for the EU as well.