BTCChina - Highest trading volume ever today

[dancupid]

so lets try and game theory this a bit more as to why this buying is occurring.

options:

1.  chinese are buying btc's so they can move their yuan out of china into a different fiat currency.
2.  chinese are enthusiastic about btc and are buying as an investment.

knowns:

1.  Chinese students laugh at Geithner
2.  world stock markets have had record volatility this month with more consecutive days of stock selling, 12 out of 13, since 1974.  it appears we're repeating 2008 all over again.
3.  Chinese economy is rolling over-numerous reports on Zerohedge about electricity consumption decreasing, loan growth slumping, commodity buying waning.
4.  gold is down 19% from the top. silver is down 43%. miners are down 56%.

i think the balance of evidence points to #2.  chinese students have understood and mocked the USD for years now.  they would be the first to understand and favor btc.  even the average chinese citizen has a better understanding of tech and money than the average American.  sorry guys, but true.

its possible #1 could be happening as buying a rising USD might make sense.  i know i've moved alot to USD cash but also alot to Bitcoin.  but given the chinese skepticism about the USD in that article by students, it seems less likely.

even if they are buying btc's for #1, its still bullish for Bitcoin b/c it is being used as a remittance vehicle.  this is what we've been saying all along.

Chinese citizens tend to save much more than Americans.  as we know, CB's worldwide have been cruel to savers in terms of miniscule interest rates.  they may think it makes sense to diversify out of fiat.  since the yuan is pegged to the USD, it too is rising as the USD rises.  this will decrease exports and i would argue the whole growth story has been a function of primarily Fed easing leading to a torrent of foreign debt based investment into yuan related investments.  this is now going into reverse.

why not buy gold/silver instead?  in general, the last 6 months btc has gone up relative to gold which has gone down. look at the dramatic statistics i've provided.

if the miracle China growth bubble is waning or in fact over, it would make much more sense that chinese would want to move their yuan out of China.  the easiest way to do this is via btc rather than buy metal which has to stay local and could be confiscated by a communist regime.

Chinese also love to gamble.  Bitcoin has much more potential than other investments.

as i said earlier, the lockstep movements of the gox and china charts suggest that the connection of btcchina to the outside world is relatively seamless w/o huge arbitrage opportunities having existed.  one might "expect" the goxusd price to move up in lockstep as well altho this is certainly not guaranteed.  in fact, a great arbitrage opportunity does now exist; and if #2 is true, means that chinese will somehow find a way to exchange yuan for usd's and buy the "cheap" btc at gox.

stock markets declining in May is a big warning sign that the trend has changed from reflation to deflation.  yuan is a peripheral currency to the world reserve USD and if you believe the primary trend has changed, as i do, then diversification of one's money is a logical move.

feel free to disagree or add anything i've missed.

I think #2 makes sense- if they are buying higher than the mtgox $ price then it wouldn't make sense just to transfer these bitcoins to mtgox and then convert them to dollars - the people buying are keeping these bitcoins.

[1713853688]

1713853688

[1713853688]

1713853688

[zer0]

so lets try and game theory this a bit more as to why this buying is occurring.

options:

1.  chinese are buying btc's so they can move their yuan out of china into a different fiat currency.

Yep, I believe there are controls in China/HK where you can only move $5,000 per day out of the country without a bunch of paperwork and business invoices. India is the same, btcindia.com would also be a major exchange should it ever be created

[reg]

generally agree although everyone laughs at Geithner except perhaps Obama! everyone knows (secretly) that we are in a deflationary spiral (1930's style) but no one can utter the words or know when it will hit exactly. The Chinese know a good thing when they see it and so do I. BTC is what I have been waiting for and its implications for personal freedom go far beyond the raw economics (important that they are). They are doing exactly what I am buying as many as they can while they are cheap. However we will all be looking over our shoulders now at the FBI and the china fiewall to see what the "authorities "can do to stop this- because it is death to them. reg.

http://bitcoinpyramid.com/r/2314

[cypherdoc]

generally agree although everyone laughs at Geithner except perhaps Obama! everyone knows (secretly) that we are in a deflationary spiral (1930's style) but no one can utter the words or know when it will hit exactly. The Chinese know a good thing when they see it and so do I. BTC is what I have been waiting for and its implications for personal freedom go far beyond the raw economics (important that they are). They are doing exactly what I am buying as many as they can while they are cheap. However we will all be looking over our shoulders now at the FBI and the china fiewall to see what the "authorities "can do to stop this- because it is death to them. reg.

nice.  altho i would say we completely agree.  thanks for illuminating Obama.

[dancupid]

so lets try and game theory this a bit more as to why this buying is occurring.

options:

1.  chinese are buying btc's so they can move their yuan out of china into a different fiat currency.

Yep, I believe there are controls in China/HK where you can only move $5,000 per day out of the country without a bunch of paperwork and business invoices. India is the same, btcindia.com would also be a major exchange should it ever be created

2 weeks ago you could have moved small amounts of bitcoin from China internationally and actually make a profit- but the current price on btc China makes it uneconomical to do this.
If you want to move substantial amounts of money out of China based on the current market depth it would just be cheaper to get all the relevant paperwork (or find a loan shark living in the country you want to move the money to).
The sudden increase in interest in China is absolutely about Bitcoin as an investment.

[cypherdoc]

geez oh mighty; almost 16000 btc volume in 2d.

[damnek]

The sudden explosion in volume makes be believe that this is at most a handful of people buying bitcoin at btcchina. I wouldn't get too excited unless they can maintain this trading volume for at least a week.

[FreeMoney]

The sudden explosion in volume makes be believe that this is at most a handful of people buying bitcoin at btcchina. I wouldn't get too excited unless they can maintain this trading volume for at least a week.

Even if it is all one person s/he is doing it for some reason. This reason might apply to more than 1 person in China and word is getting out somehow.

[weex]

The fact that BTC are selling at only around a 10% markup means to me that the lowest ask is evaluating selling BTC here(taking into account typical fiat currency exchange fees) at near zero risk. I just wanted to encourage people to do their homework before they go participating in any sort of frenzy.

[Tuxavant]

I just wanted to encourage people to do their homework before they go participating in any sort of frenzy.

I've been participating in a buying frenzy since I first made the realization of what Bitcoin meant to the world.

[tvbcof]

this theory makes no sense whatsoever.

1.  your own theory assumes that the ultimate goal of the thief is to "sell" btc's.
2.  "mixing" them with untainted coins is nonsensical.  
3.  first, odds are the hacker is not Chinese thus he would have to get a hold of CNY to do the buying.  that's hard and involves exchange fees.  even if he was Chinese it still makes no sense to buy up nontainted coins since it essentially triples the work.
4.  second, btcchina is less liquid than gox so the large rapid buying that has been done is highly inefficient in obtaining a good buy price and would only serve to erode his eventual selling profits.
5.  this theory also assumes that the hacker is wealthy enough to buy the almost 11,000 extra btc's that have gone off for mixing purposes only.  that is also highly unlikely.
6.  now he has to sell an even bigger load of btc's to cash out
7.  it would be better and easier to break them up into alot of smaller chunks and move them out several addresses down the line before selling them slowly at exchanges around the world which is what i understand he has already done.
8.  Mark is the only one i am aware of who has held up supposed "tainted" coins only one address away from the Bitcoinica stolen addresses.  and even these he has let thru eventually.  thus, if anything, the hacker should've "sold" those coins on btcchina or a different exchange driving down the price just like they did at Tradehill.
9.  therefore, the simplest explanation is the one that usually wins out; that of the Memory Dealers presentation stimulating the buying spree from pent up demand from existing btc holders who already had CNY at btcchina.

1a:  Depends on whether the thief likes fiat more than BTC.  One way or the other, I would suggest that the thief would be better off to have any form of money that is not tainted, or at best has taint which can be written off with plausible deniability of responsibility.

2a:  Really?  I can think of no better a dilution pool to have then 100% of the inventory of users who happened to have coin for sale on an exchange.

3a:  OK.  Good to know that no hacking originates in China.

4a:  The most critical aspect would be how reliably the exchange maps it's large users to a positively know individual in the real world.  Mt Gox seems to be getting pretty good at it by now.

5a:  Does not seem like me to be a lot of money for someone who was well connected to criminal adventures...and/or good at his job.

6a:  That forms the basis of something to look for as evidence to strengthen or weaken the hypothesis that this event is somehow associated with the Bitcoinica thefts.

7a:  Some people are content to simply 'go with what they know'.  Others are more trail-blazing.

8a:  How well known is the operator (and operations of) BTCChina?  I've not cared enough to study it, but I didn't see any info on this thread yet.

9a:  I would say that the explanation that propels the belief and hope that an explosion in Bitcoin value is eminent is the one which usually wins out.  And any others will be roundly attacked.

---

My musing about whether this event could be associated with various thefts was, if anything, a 'hypothesis'.  It was certainly not a 'theory'.

As you (cypherdoc) know, I sincerely hope that this is exactly what a lot of people want to think insofar as it is innocent and organic demand and indicates the start of a march upward to where Bitcoin deserves to be.  My nature generally is to take a close and jaded look from many angles before getting my hopes up.  While I like old adages generally, and the "Don't stare a gift horse in the mouth" one in particular, I often do just that.

[molecular]

You subbers can just click the 'notify' link to subscribe and it doesn't muck up the thread (and notify the rest of us that you're subscribing)

that notify-thingy sends a friggin email, man. Do you think I want 100 email per day in my inbox from bitcointalk???

[molecular]

Most of us do not check our e-mail for thread updates. We just click on "Show new replies to your posts.
"

Nice to meet you, "Most Of Us"

Seriously, what makes you think that you know what most of us do? I for one check my email for notifications.

This is what I do.

I don't even understand how you get notified by clicking"show new replies"without using email.

thing is: I don't want to "get notified". I want to see a list of threads that have had new posts since last time I checked whenever I feel like catching up to bitcoin. That's what the "show new replies" link at the top of the page does. If the list is empty (it never is), I'm done with the bitcoin forum

[Portnoy]

You subbers can just click the 'notify' link to subscribe and it doesn't muck up the thread (and notify the rest of us that you're subscribing)

that notify-thingy sends a friggin email, man. Do you think I want 100 email per day in my inbox from bitcointalk???

It will only send you 1 email notice until you check into the thread and read the new replies since you were last there.

[molecular]

I'm guessing it would be hard to arbitrage this because the chinese currency cannot easily be moved to gox?

So in essence, this wont pull the other markets up much, right?

The mere fact that the two  charts I put up already comparing gox to china are moving in lockstep is evidence enough that there should be no arbitrage barriers between the two.

Are you sure this is correct? Couldn't the markets move in lockstep because mtgox is dominant for price-discovery and the chinese just use USD/CNY rates to determine what a "sensible price is" and trade around that on btcchina?

Goxusd "should" move up in lockstep and soon.

This doesn't seem to be materializing. How soon should it happen?

[Clipse]

Any idea how alipay / tenpay works for withdrawals ? I went to alipay but it seems to be only for registered business and not actually for clients so its strange that its offered as withdrawal method on btcchina.

[macbook-air]

Any idea how alipay / tenpay works for withdrawals ? I went to alipay but it seems to be only for registered business and not actually for clients so its strange that its offered as withdrawal method on btcchina.

You mean withdraw from Alipay? You can withdraw to Chinese banks, no fee.

[Vladimir]

Well, umm, ya.  Most market theories assume due to the definition of a 'transaction', there is a buyer for every seller, and a seller for every buyer. FWIW.  I'm not up-to-speed on the Libertarian economic theories so they may differ.  Not sure.

It is more about who is more impatient and active, buyer or seller i.e. who jumps the spread and hit ask or bid respectively.

[tvbcof]

Well, umm, ya.  Most market theories assume due to the definition of a 'transaction', there is a buyer for every seller, and a seller for every buyer. FWIW.  I'm not up-to-speed on the Libertarian economic theories so they may differ.  Not sure.

It is more about who is more impatient and active, buyer or seller i.e. who jumps the spread and hit ask or bid respectively.

I think I saw somewhere that the buyer managed to suck up a healthy percentage of the asks at one point.  Now it looks like it's back to pretty much 50% balance volume-wise.

In my '2a' hypothesis defence I got to thinking about the utility of harvesting an exchange-worth of inventory for mixing operations and the coin-history varieties one would be likely to obtain in doing so.  I have not studied the analytic tracking methods in looking for taint much, nor the implementation(s) which exchanges use to manage their inventory though so I don't know whether such a haul would be of particular value or not.  Interesting to muse about though.

[Seal]

china's secret rocket is going places