China 31st of January

[T.Stuart]

Bobby Lee and BTC China did a survey a while back and they found that a significant number of people using Bitcoins were highly educated people who saw BTC has a long-term value hold. Are people just going to sit on their bitcoins and wait for them to rise?

Just like everyone else

[traderCJ]

Ask yourself this.  If you had the chance to own a chunk of something that could appreciate tremendously against all currencies over your lifetime but you couldn't convert it directly to your country's currency, would you buy it?  Obviously, you would.  There's nothing stopping a Chinese citizen from purchasing something overseas either directly with Bitcoin or through an intermediary, and having it shipped to China if desired.    This is really no different than buying a stock of gold which is stored out of sight.  I really don't see what the fuss is.  What you should really be concerned about is whether the Europe, Russia and the Americas will maintain their accommodating Bitcoin stance.  If it is banned damn near everywhere, then you have a problem.  From a long-term investment standpoint, Chinese regulations simply don't matter.

That's not to say bad news from China will not further rock the markets.  It will, and I wouldn't be surprised if there is more bad news to come.  Traders will exploit the expected panic, the sheep will run, the price will drop, rebound, those who cashed out will regret it, and the whales will have their bellies full of plankton.  Just another boom, panic, rebound cycle in the Bitcoin world.  Just make sure you're either the guy selling the rumor and buying the news or a long-term holder.  Otherwise, you're a sucker.

[Apostata]

Ask yourself this.  If you had the chance to own a chunk of something that could appreciate tremendously against all currencies over your lifetime but you couldn't convert it directly to your country's currency, would you buy it?  Obviously, you would.  

But what if you couldn't buy that asset by traditional means, because the government blocked the ability to do so.  And then, if you sold that asset, you wouldn't be able to easily access your profits or even the principal investment.  Would you still buy that asset?

There's nothing stopping a Chinese citizen from purchasing something overseas either directly with Bitcoin or through an intermediary, and having it shipped to China if desired.    This is really no different than buying a stock of gold which is stored out of sight.

You may be correct in this assumption, but it seems like too much hassle.  And then there is the fact that at this point there is not a lot you can buy with Bitcoin.  Or at least, less than you can with fiat. 

From a long-term investment standpoint, Chinese regulations simply don't matter.

Long term I agree.  And I am about as bullish on BTC as anyone on this forum, but I am surprised there is not more focus on what is going to happen in China on the 31st.  Imagine this, you just invested into a new and risky medium, which the government has unexpectedly cracked down on, and told you you have the ability to cash out of this investment for one more month.  After that, you can not get your money out.  What would you do?

Just trying to be the devils advocate here

[traderCJ]

But what if you couldn't buy that asset by traditional means, because the government blocked the ability to do so.  And then, if you sold that asset, you wouldn't be able to easily access your profits or even the principal investment.  Would you still buy that asset?

You may be correct in this assumption, but it seems like too much hassle.  And then there is the fact that at this point there is not a lot you can buy with Bitcoin.  Or at least, less than you can with fiat. 

Long term I agree.  And I am about as bullish on BTC as anyone on this forum, but I am surprised there is not more focus on what is going to happen in China on the 31st.  Imagine this, you just invested into a new and risky medium, which the government has unexpectedly cracked down on, and told you you have the ability to cash out of this investment for one more month.  After that, you can not get your money out.  What would you do?

Just trying to be the devils advocate here

I was discussing the situation where an investor already has BTC and is contemplating selling due to not being able to Yuan out beyond a certain date.  But sure, if it is now harder to acquire in China, it will naturally become more expensive.  This assumes that its value overseas remains solid.  I agree that its usefulness in China has been diminished.  However, the real question is whether that loss in usefulness outweighs the potential upside over the next few years.  It's like buying a chunk of real estate overseas at a deep discount that you won't be able to touch for several years.

You're right, there isn't a lot you can directly purchase, face-to-face with Bitcoin, relative to fiat.  Then again, the same is true of gold and diamonds.  The difference is, Bitcoin can grow into that space.

Regarding the 31st, what would I do?  Well, the only reason someone would cash out in that scenario is if they believe Bitcoins will lose value to them beyond that date.  Assuming Bitcoin continues to rise over the long run (which I think we all do), then logically you'd only cash out because the hassle of turning a Bitcoin into something useful exceeds its value.  If coins increase in value by another 10 or 100 fold, that would have to be one incredible hassle.

So I guess the bottom line is this:  If you jumped into Bitcoin for a quick buck, you'll pull out before 1/31.  Otherwise, hodl.

[T.Stuart]

But what if you couldn't buy that asset by traditional means, because the government blocked the ability to do so.  And then, if you sold that asset, you wouldn't be able to easily access your profits or even the principal investment.  Would you still buy that asset?

You may be correct in this assumption, but it seems like too much hassle.  And then there is the fact that at this point there is not a lot you can buy with Bitcoin.  Or at least, less than you can with fiat. 

Long term I agree.  And I am about as bullish on BTC as anyone on this forum, but I am surprised there is not more focus on what is going to happen in China on the 31st.  Imagine this, you just invested into a new and risky medium, which the government has unexpectedly cracked down on, and told you you have the ability to cash out of this investment for one more month.  After that, you can not get your money out.  What would you do?

Just trying to be the devils advocate here

I was discussing the situation where an investor already has BTC and is contemplating selling due to not being able to Yuan out beyond a certain date.  But sure, if it is now harder to acquire in China, it will naturally become more expensive.  This assumes that its value overseas remains solid.  I agree that its usefulness in China has been diminished.  However, the real question is whether that loss in usefulness outweighs the potential upside over the next few years.  It's like buying a chunk of real estate overseas at a deep discount that you won't be able to touch for several years.

You're right, there isn't a lot you can directly purchase, face-to-face with Bitcoin, relative to fiat.  Then again, the same is true of gold and diamonds.  The difference is, Bitcoin can grow into that space.

Regarding the 31st, what would I do?  Well, the only reason someone would cash out in that scenario is if they believe Bitcoins will lose value to them beyond that date.  Assuming Bitcoin continues to rise over the long run (which I think we all do), then logically you'd only cash out because the hassle of turning a Bitcoin into something useful exceeds its value.  If coins increase in value by another 10 or 100 fold, that would have to be one incredible hassle.

So I guess the bottom line is this:  If you jumped into Bitcoin for a quick buck, you'll pull out before 1/31.  Otherwise, hodl.

I think you are right about the sentiment generally.

Many Chinese, including most big players, will not give up their investment.

For the returns the extra efforts required to cash out are well worth it. They will sit on their investment as long as Bitcoin keeps evolving in the US etc. I've said that western bitcoiners need to make an effort mentally to stop following China, but actually we will likely revert to the Chinese following the US / west price naturally.

Even if China was to ban its citizens from holding Bitcoin (which is highly unlikely in my opinion), many people would still be able to get around it. Investing in a US-based hedge fund offering bitcoin investments for example, having an overseas family member hold your bitcoins for example, and many other loopholes and ways, legitimate and illegitimate. Look at the Macau chips phenomenon. Think about Hong Kong. There really are lots of opportunities for those who look for them. And it is my gut feeling that there is a sense of pride among people and investors in working their way around obstacles. I live in Belgium, for example, and we have the highest rate of income tax in Europe. Avoiding paying income tax any which way possible is almost like a noble sport here... honestly. Everyone does it, and people enjoy helping eachother to do it also!

[dg2010]

T.Stuart - Great analysis. I am still positive about BTC in China long term.

[pietje]

Since everyone knows what will happen at 31st januari i dont think it will influence that much.
Everyone who wants to get out will be out before that date or are already out, the others just hold. Just look at the volumes in china.

[Parazyd]

Since everyone knows what will happen at 31st januari i dont think it will influence that much.
Everyone who wants to get out will be out before that date or are already out, the others just hold. Just look at the volumes in china.

People say it's artificial/fake.

[Milotyc]

Looking at the volumes my best guess is most of them are keeping their btc and wait instead of cashing out.

[alivecrypto]

Nothing is going to happen in 31 all chinese bitcoin volume are now in powerful hands who actually wants to trade and hold it, now there will be no problem chinese will come out from china and start trading in HK or SG so nothing will happen. Chinese Government is kicking there ass themselves.

[T.Stuart]

We're leading now baby! 

[thaaanos]

China is the worlds largest exporter, that makes it the largest user of international transactions, which is what bitcoin is all about no?
If bitcoin loses china userbase it will not be a good thing. Hopefully this may force bitcoin in China to circulate and serve the purpose it was made for.

[Jcw188]

Won't be able to figure out what that meeting is all about.  Nothing but rumours out of China.  They are not the most open place.  We'll have to wait and see what the price tell us around the end of Jan.

[MatTheCat]

Looking at the volumes my best guess is most of them are keeping their btc and wait instead of cashing out.

Perhaps the crash in China created some massive Bitcoin whales (someone paid CNY for them $240 coins). Perhaps these whales are holding out, in anticipation of a U-Turn from the Chinese government. Perhaps insiders know that Bitcoin will be allowed to continue in China.....


.......but perhaps not.

Perhaps if China does not change it's stance on Bitcoin, perhaps these whales are going to be forced to dump, in which case we had all better run for cover when the time comes, if we see it coming!?

[T.Stuart]

Looking at the volumes my best guess is most of them are keeping their btc and wait instead of cashing out.

Perhaps the crash in China created some massive Bitcoin whales (someone paid CNY for them $240 coins). Perhaps these whales are holding out, in anticipation of a U-Turn from the Chinese government. Perhaps insiders know that Bitcoin will be allowed to continue in China.....


.......but perhaps not.

Perhaps if China does not change it's stance on Bitcoin, perhaps these whales are going to be forced to dump, in which case we had all better run for cover when the time comes, if we see it coming!?

I doubt very much they are all going to dump. Think about it. Looking west and towards the future of Bitcoin, would you dump?

Bitcoin offers a very real opportunity to an investor. It also offers a strong incentive to a bigger buyer to look out at the world as if it was their oyster.

[MatTheCat]

I doubt very much they are all going to dump. Think about it. Looking west and towards the future of Bitcoin, would you dump?

Bitcoin offers a very real opportunity to an investor. It also offers a strong incentive to a bigger buyer to look out at the world as if it was their oyster.

An excellent point.

If I were wealthy Chinese, I would certainly be interested in having a stake in an asset that has so far exploded in value and over the longer term, looks set to continue to gain value. If nothing else, a great way of shifting wealth around the world off the radar of the PBOC.

However, even if your assertion is generally true, it is not going to be universally true. But lets say it is generally true and when the curtain comes down on CNY Bitcoin transactions (still over 50% of all Bitcoin exchange transactions btw, whether they be fake or real), and a staggering 70% of Chinese held Bitcoins simply go into cold storage, that still leaves 30% that are going to be getting liquidated before the month is out. This would still be a very significant volume of Bitcoin and even they were all bought on the cheap by wealthy Chinese investors accepting that these Bitcoins are for cold storage, are the USD exchanges simply going to behave as though the big wind down in China doesn't exist?

Despite your numerous posts stating that CNY exchanges are no longer leading the market, I have looked and would say that CNY exchanges are still most certainly leading the market. I bought in at $770 last night, and went to bed calmed by the fact that Huobi had just taken a great big leg up (yes, Bitstamp followed).

[T.Stuart]

I doubt very much they are all going to dump. Think about it. Looking west and towards the future of Bitcoin, would you dump?

Bitcoin offers a very real opportunity to an investor. It also offers a strong incentive to a bigger buyer to look out at the world as if it was their oyster.

An excellent point.

If I were wealthy Chinese, I would certainly be interested in having a stake in an asset that has so far exploded in value and over the longer term, looks set to continue to gain value. If nothing else, a great way of shifting wealth around the world off the radar of the PBOC.

However, even if your assertion is generally true, it is not going to be universally true. But lets say it is generally true and when the curtain comes down on CNY Bitcoin transactions (still over 50% of all Bitcoin exchange transactions btw, whether they be fake or real), and a staggering 70% of Chinese held Bitcoins simply go into cold storage, that still leaves 30% that are going to be getting liquidated before the month is out. This would still be a very significant volume of Bitcoin and even they were all bought on the cheap by wealthy Chinese investors accepting that these Bitcoins are for cold storage, are the USD exchanges simply going to behave as though the big wind down in China doesn't exist?

Despite your numerous posts stating that CNY exchanges are no longer leading the market, I have looked and would say that CNY exchanges are still most certainly leading the market. I bought in at $770 last night, and went to bed calmed by the fact that Huobi had just taken a great big leg up (yes, Bitstamp followed).

First thanks for explaining your position.

I don't know about Huobi but BTC China was most definately following Gox and Stamp with some clear lag. Stamp led the whole thing.

[T.Stuart]

It's time to show some resilience in the face of any Chinese pressure. It is already happening. If we had had this negative news three weeks ago I bet prices would have halved instantly! But look at today so far: a return to a normally bullish trendline.

Just remember that Bitcoin has huge untapped markets to move into in many countries, and that this is starting to happen.

This means that fundamentally there is no reason for anything happening in China to affect Bitcoin at this early stage. Like if you put a rock on top of a seed it'll grow right around it; chop a tree down and it's finished.

Bitcoin is not a tree yet which means that as long as it has any room for growth (and it has plenty) fundamentally it will not be affected  by China.

The problem is us! It's psychological. If we panic, lose face, turn and run, we will just be wasting our time. There's nothing to fear. Don't falter in the face of negative propaganda, which sadly will probably be passed about even by a few people here.

Hodl on!

[MatTheCat]

The problem is us! It's psychological. If we panic, lose face, turn and run, we will just be wasting our time. There's nothing to fear. Don't falter in the face of negative propaganda, which sadly will probably be passed about even by a few people here.

Hodl on!

Nothing to fear?

would the possibility of:

MtGox: $160 Bitstamp $110 BTC38: $0.00

fear you out a bit?

When I first became aware of you on here T.Stuart, you seemed balanced enough in your posts, but as time has progressed you have become more and more fanatical.

I bought in at $835, had every opportunity of turning a tidy profit, but when I came back from a walk, I saw that Bitcoin on Bitstamp had broken through a very important $905 short term resistance and was trading at $880, before any 'news' came on the scene, I recognise this to be a bearish signal and like a skittish reactionary bitch, I sold everything right away (as opposed to waiting on the inevitable bounce). Although I cut my own throat once again, turns out I did read the signals correctly despite being a nervy trigger happy bitch which is my flaw, being drunk on Bitcoin punch is yours.

I would suggest that there is not much more upside in this market for the time being, but a good bit of downside is yet to come. You have been raving on about Bitcoin since $500 level, so I am assuming that you bought in then. If so, take some profits man!

Bitcoin is no longer about anarchy or monetary freedom, just look at the human behaviour that has enveloped around it. Bitcoin is the spawn of Satan and the only reason you should be into Bitcoin is for what it can do for you, whether that be buying substances that you couldn't pay for using conventional means, shifting money around, or speculating. I suspect that the reason so many around here have such a hard-on for Bitcoin is for the latter reason, speculation. That means they are out to seek profit and if this is the case, the need to get of the Bitcoin kool-aid and recognise when the right times are to take some profit.