Yeah... I wasn't being serious. Just messing with you all about the rollercoaster.

the market will continue to weaken the yuan against the dollar. china would probably do best to do one drastic devaluation, but instead it seems like their MO is to let everyone pile in on the yuan shorts and then whenever there's too much speculation or overheating somewhere, they wait until it's too overinflated and they proceed to snap necks in one slap.

this particular slap affected the interbank lending rates and caused a wave of profit taking in btc since btc is highly correlated with yuan capital outflow?

thats my understanding anyways, could be wrong

That seems to be the common theory going around. Then again, every time volatility strikes, people point to whatever world events are going on and say thats the reason.

Also, press release from Chinese exchanges today about a meeting with the government. Any time news, real or fake, hits the press about the Chinese government paying attention to Bitcoin, the price drops.

Personally, I think a Chinese government crackdown is inevitable. I haven't really heard many good reasons to the contrary. It just a matter of when Bitcoin market cap reaches levels where it can act as a mechanism to provide meaningful capital outflow. When it was revealed that in one month over a $bln in ATM withdrawals left China to Macau, they imposed halved ATM limits to curb outflow.

Just waiting for China to ditch the yuan and adopt btc

Can someone ELI5 how CNY outflow in China through Bitcoin actually works in practice?

A typical customer probably buys Bitcoin with CNY either over-the-counter or on an exchange. After withdrawing the coins to a wallet, what options are available for this person that concerns China and may provoke capital controls? How will this result in a net outflow of CNY (and in theory a CNY appreciation)?

Theory 1) China gonna clamp down this ish soon, short btc

Theory 2) CNY gonna keep losing strength, and capital controls attempts will make everyone try harder to get money out, long btc

I don't know if I should buy or not. Can someone from the future tell me what to do?

Buy now. If it goes up $50, sell. If it goes down $50, buy another. Rinse, repeat.

TL;DR Bitcoin itself does not lead to net capital outflows, but it makes it easier for individuals to move money out of China and probably helps making the market for agents who actually move capital out more efficient.


It is a bit hard to understand because buying and selling Bitcoins on chinese exchanges does NOT lead to net capital outflows from China.

However people buying Bitcoins on chinese exchanges are obviously able to move their own money out of China. But because someone always has to take the other side of the trade the net result is no net outflow.

Example:
Person A has 5000 Yuan and wants to move this into USD. He buys one Bitcoin on the exchange from person B. Now he is able to sell this on a foreign exchange and has moved his 5000 Yuan out of China.

Person B had one Bitcoin (which he could have sold on a foreign exchange), but he no longer has this, but instead 5000 Yuan.

As you can see net capital outflow is 0, because the Bitcoin that was bought was already outside the closed Chinese system.

Because of this the only problem I see with allowing Bitcoin trading for the Chinese goverment is that it is now easier for individual people to move their money out. Without Bitcoin you would need some kind of connection to be able to do this. Now everyone gets access to this oppertunity.

What Bitcoin does is make it easier for those who are able to move money out of China get in touch with customers who want to get their money out. However Bitcoin is not what makes the capital outflow possible. The actual capital outflow still happens through the same systems as before.

A side effect of this should be that Bitcoins on all the chinese exchanges should trade at a premium equal to what it usually costs the agents who move money out of China to do this. However a lot of other factors are probably also playing a part in whatever premium we observe at any time.

Another part of the puzzle is Bitcoin mining. Buying mining equipment and power in Yuan and being able to sell your Bitcoins for USD obviously leads to you being able to turn Yuan into USD. But this situation is not any different than say if you bought a LED light factory with Yuan and sold the lights for USD. Still no Yuan is exchanged for USD by the PBOC (which is what they really want to limit). I really do not see the big problem here either, except that setting up a mining rig is easier than running a production factory.

Hopefully the Chinese government also realize this and focus their efforts to stop the real leaks instead of Bitcoin, but this is China so anything could happen.

The Chinese culture is one of the oldest continuous cultures in the world, with the Han Dynasty tracing back to 2200 years ago. I think everyone saying "You never know, China could do anything, they're unpredictable" in a negative way is wrong. They are unpredictable in a good way.

The majority of the mining is done in China, like 90%. I'm pretty sure the Chinese government is aware of this. I don't think the Chinese government wants to crash the price of bitcoin to 0. I do think they might have seen their currency dropping vs bitcoin and wanted to take steps to slow that process. I don't think the Chinese government is opposed to bitcoin in general. The Chinese people are very sharp, and incredibly hard-working in general. They also have gambling as a part of their culture, and I think we can all agree, this is a high-risk situation.

It seems like this is some serious bluffing going on at incredibly high-stakes here. Chinese government is basically saying, "Be careful with this high-risk investment" knowing their citizens will be drawn to high-risk investments due to their natural gambling tendency. It's almost an advertisement!

I honestly want bitcoin here to go to the core. Let's see 600$

This move today is just unbelievable.

"PBoc detail: exchanges cant do offline promotion; no fake trade; Devaluation cant be mentioned; mandatory strong KYC "

https://twitter.com/cnLedger/status/817550313636798464

Nothing has changed.

On okcoin the kyc is stronger than bitstamp/gdax/coinbase/etc.

I know people who've been called on their phone with the number listed from okcoin just to see/verify info. This has been their policy for years now

What do you make of the "no fake trades." Will that impact volume on the Chinese exchanges?

I don't know what it exactly is referring to. But on houbi and okcoin the volume is faked because a lot of the trades are simply wash trades due to their no fee on trade model on the regular exchange. Okcoin futures volume is completely legit and not fake.

Also There are people that don't really trust star (CEO of okcoin) and this notice will delight them bc they think there's shady things going on behind the scenes on the exchange. But you have to understand that the majority of people on houbi and okcoin are Chinese or legacy American accts.

Is there a way to buy small amounts of bitcoins on a regular basis without paying a fee?

http://www.zerohedge.com/news/2017-0...cember-outflow

Where are you located? Can buy off any exchange. Fees are very minimal

helps to have a china stock chart for reference. the turbulence with interbank rates and yuan shifts were way more massive in august of 2015 (and the ripples into US markets were significant whereas now US markets dont really care), but that was due to their stock bubble bursting.

i would say that whenever the USD/CNY (inv) and the china reserves have a semblance of recovery, that might be the time to temporarily get out of bitcoin. china's habits with stuffing yuan shorts aggressively is well documented and you can see the spikes in the charts, but it seems like there is no end in sight for yuan pain.

OVERNIGHT CNH HIBOR PLUNGES 47% TO 14.05133%.
China Fixes Yuan at 6.9262 vs 6.8668

It's early, but no real bid in BTC. Not a good sign if nothing returns overnight. Although everyone might be hesitant to retest the waters while waiting for the PBOC to lower the boom again.

I just got into BTC but it looks like a potentially solid long term investment, so I'm contemplating investing 10k in BTC for the long run..(at least a year) and see how that goes. Thoughts? From what i've seen so far I personally think the US will eventually use it more and it will grow even more in China as well.

1 year isn't very long term for BTC. I'd plan on being in 3-4 years minimum. At least until the next halving.

If you're going to do 10k, buy in 500-1k portions over the next 10-20 days.

This decision will likely move the price up a lot or down a bit

http://www.coindesk.com/needham-bitc...sets-approved/

The good: Easily can go up 50%-150%+ this year, barring major incidents.

The bad: An incident is probably gonna happen eventually

Perhaps smarter people than me can correct me if I'm wrong, but I don't see much reason to be optimistic that we won't see a mtgox happen to at least one of the big Chinese exchanges. To my knowledge, there exists little to no oversight or regulation of these companies, and the government is/was asking banks to block deposits to Bitcoin exchanges.