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Bitcoin Tumbles as PBOC Declares Initial Coin Offerings Illegal
- gruez 9y agowhy does it feel like every time bitcoin goes up, the chinese government has some sort of announcement to bring it back down? see: last time when they prohibited banks from buying/selling cryptocurrencies. does someone there hope to earn some quick $$$ from shorting bitcoin (profit motive), or are they doing it to cool down a bubble (protect chinese investors motive)?
- chinathrow8 9y agoBecause Bitcoin and ICO are the main mechanism to get money out of China, with overseas cash withdraw very limited for Chinese citizens, with 50% of millionnaires in China wanting to leave (http://bit.ly/2uzYLyu http://bit.ly/2uzYLyu) (and the other 50% already having left probably), and with Chinese government cracking down on real estate/insurance tactics to move money out. But it's really doubtful they can prevent bitcoin from transfering money out of China altogether (unless they ban bitcoin)
- chinathrow8 9y agobtw if you want to make real money, figure out how to help Chinese millionnaires move money out of China
- gnaritas 9y agoThat's crypto's primary use case already.
- chinathrow8 9y ago...until China bans bitcoin, which might happen soon, after the october national congress
- gnaritas 9y agoIf China could effectively ban bitcoin, they'd have done so long ago; they don't because they can't enforce it and they know it and it's better to look like you don't care that to show that you don't have the power.
- flunhat 9y agoChina bans a great many things, even if those bans can be circumvented (access to certain political websites being a notable example).
- narrator 9y agoI think China likes Bitcoin because money flowing into it does not strengthen the dollar thus putting pressure on their foreign reserves. If people are sneaking their money out of the country, they'd rather be trading it for Bitcoin than dollars.
- cerved 9y agoIf your using btc to launder money you're likely converting it to other stable currencies
- narrator 9y agoExcept if they leave the money in bitcoin they don't have to explain where they got it. If they turn it into a foreign currency they have to tell a bank where it came from. Come to think of it, that's probably where all the ICO demand is coming from. These guys have money stuck in crypto and are desperately looking for a way to invest it.
- atomical 9y agoExactly. The bitcoin millionaires have a lot of unrealized gains. That's where the term whale comes from.
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- seanmcdirmid 9y agoUhm, you are a bit late, there is already an entire industry devoted to just that primarily in HK but everywhere....
- gruez 9y agobut why not ban it outright? why go through the routine of acting tough on bitcoin every time a bubble comes up?
- IIAOPSW 9y ago>Because Bitcoin and ICO are the main mechanism to get money out of China No bitcoin and ICO's are a mechanism to get money out of China. Shady HK pawn shops, "family" vacations with strangers (the limit on money moved is per person) and straight up smuggling in bodily crevices are still far more popular. Right now China makes more on bitcoin than it loses because 70% of mining happens in China. So long as this remains true China will not ban bitcoin. Everything else is just noise and FUD.
- whytaka 9y agoApart from this ICO ban, how has the Chinese government acted against Bitcoin? If anything, the large presence of Chinese miners in the blockchain space should suggest that they have the government's blessing.
- Animats 9y ago"Mining" looks like an export business from a Chinese perspective. Mining companies build facilities in China, hire people in China, make something of value, and export it. That's encouraged by policy. "Exchanges", though, are iffy. Those are financial institutions, and the PBOC can regulate them if they want. They've done a little regulation, clamping down on margin and accepting credit cards to buy Bitcoin. Bitcoin used to be down in the noise as a way to get money out of China, and was tolerated in the way that putting all your relatives on the train to Hong Kong loaded up with 20,000 RMB each is tolerated. The numbers for Bitcoin are getting bigger, though, making PBOC action more likely. A few years ago, it looked like yuan convertibility was on the horizon, but that didn't happen.
- turk183 9y agoMaybe it's part of the scam?
- thisjepisje 9y agoBitcoin price goes from 1000 to 5000 in 6 months, but now it's tumbling just because it went back to 4200?
- okket 9y agoI love buying cheap bitcoin. Can it fall a bit more, please?
- ringaroundthetx 9y agopeople are going to make a serious killing selling puts on this when the regulators and industry get it together
- turk183 9y agoBut they never did that with pink sheets penny stocks. It all collapsed for different reasons.
- spookyuser 9y agoWhen it goes from 5k to 10k there will then be the inevitable slew of headlines: _Is it time to start paying attention to the bitcoin???_
- ISL 9y agoRarely, if ever, should one pay attention to a descriptor in financial headlines. The facts are interesting, but the descriptors are largely emotive.
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- trophycase 9y agoTumbling upwards
- grubles 9y agoStrange title considering Ethereum tumbled from nearly $400 to $275 because of the ban.
- yebyen 9y agoAt-large people are more interested in Bitcoin in the news. I personally agree with you at Ethereum being more interesting, and much more central to the ICOs issue, but it's also less stable (bigger swings in price), and higher risk (risk/reward) while being newer, and more unknown in the market. My dad has started sending me Bitcoin news. I'm so proud. I was proud at first when he was able to find Bitcoin news in his regular news sources. I'm even more proud now that he's sending me news with relevant, quality information that I hadn't already heard! It is not that strange though, when you consider the market cap of Bitcoin today is $71B and the cap of Ethereum is $28B (and is measured in bitcoin, at least on the first Google result that I was able to find.) Is a 30% drop in ETH prices really bigger news than a 20% drop in Bitcoin prices? Bitcoin was the first mover, basically made the market, and has all of the mindshare. It's basically the USD of cryptocurrencies.
- numanumakid2017 9y agoGood. We only need 1 or 2 e-currencies. Ppl have to accept the fact that they missed the boat with bitcoin and ether.
- Lerc 9y agoAren't ICOs more of an altcoin phenomenon? How does this impact upon Bitcoin? To me It looked like Bitcoin just bounced off a psychological ceiling at 5000USD. It has done this with various round number levels in the past. It makes a bit of sense if you consider people are inclined to think something like "I'll sell when it reaches $5000" There also seems to be a tendancy to use evocative language (collapse,tumble,collapse etc.) to describe what has often been a loss of only a few weeks worth of gains. I guess when people have an agenda to push on the other side they call the same thing a correction. I don't claim to have any special knowledge of how all this works. It just seems to me that many of the authoritative sounding voices are actually as clueless as the rest of us.
- sillysaurus3 9y agoIt doesn't. The title is clickbait. Nobody knows why Bitcoin goes up and down, but people listen to whoever talks authoritatively on the subject. China's announcement was probably a trigger that caused people to sell, rather than being directly responsible for people selling.
- frutiger 9y ago> China's announcement was probably a trigger that caused people to sell, rather than being directly responsible for people selling. So you're agreeing with the title - the announcement (directly or indirectly) is what caused the fall in price.
- rothbardrand 9y agoIt does seem that consistently this year, every time Bitcoin hits an ATH or psychological price, that the PBOC issues some edict or warning that causes the price to drop. There's even a meme for this phenomena: https://www.youtube.com/watch?v=Ry6PpRXk0dQ https://www.youtube.com/watch?v=Ry6PpRXk0dQ This is from 2014! (I know the link goes to content not typically found on HN, I'm doing it for the purposes of illustrating that this is such a seemingly common occurrence.)
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- zeta0134 9y agoWarning: Site has autoplaying video. What's HN's criteria on the [video] tag, is it appropriate for links which include a large auto-playing video, but also contain article text? Or is it reserved for content which is exclusively in video format?
- CamelCaseName 9y agoI don't know what HN's criteria are, but Safari recently blocked autoplay videos and I suspect other browsers will add this functionality soon enough that this problem will disappear.
- arikr 9y agoCan Chinese investors still invest in foreign ICOs, or is that now illegal too?
- kirillzubovsky 9y agoEverything is going to be alright. Major coins crashed for a few hours but are now coming back up. There's a strong long-term potential in crypto that would be worth a lot, in privacy/operability if not value. Between now and then, there are going to be a lot of scammers and ups and downs. Hopefully the coin can mature and survive through all of it.
- LastM6 9y agoIf China cracks on exchanges, everyone's out of luck. And they said already they will now audit them. A b an is coming, and other nations are and have been following to tighter control over cryptos and ICO's. Dark days ahead.
- subru 9y agoBTC has never-before seen volatility, biggest bubble of all time. If bagholders are all aboard, prepare for a dip below 2k for a swing. The market is very orderly (which is why I was able to predict both the price and time of peak, see my other account) using tech analysis only. Therefore there is sufficient evidence of a balanced disparity between insiders (brought to you by GS and company) and the uninformed. For there to be a move above 5500 you'll need a new wave of buying pressure. This puppy is now owned by your rent seeking masters. It's up to the big players to govern how price is to move and that's largely a function of how much buying interest really remains. It doesn't take much to realize BTC itself has dubious value; better tech will emerge in our generation. This was merely a first step. That has nothing to do with the short term price or where it finally tops if it hasn't already, though. Goldman came out on public radio to state the price will be a buy below 2k. Wise to heed their advice here. Trick is to know which of their info they release is reliable, which requires a system in and of itself.
- kobeya 9y ago> BTC has never before seen volatility Hah!
- subru 9y agoSorry bro on my phone didn't proofread. I have since edited the post and added the missing –.
- CamelCaseName 9y agoAmazing how a dash can change the meaning of things.
- mrb 9y ago"BTC has never-before seen volatility, biggest bubble of all time." You are very wrong. First, volatility used to be much worse: https://mobile.twitter.com/lsukernik/status/864920873718951937 https://mobile.twitter.com/lsukernik/status/8649208737189519... Secondly, the importance of a bubble is measured relatively not absolutely: BTC may be near the all-time high but it has seen only a ~2x increase in the last 30 days, while the Nov 2013, Feb 2013, and Jun 2012 bubbles all saw 10x...
- sna1l 9y agoLong term, having some governmental oversight is key to the mainstream success of cryptocurrency. While this may make the ride bumpier, I'm happy that China has decided to setup some regulation around ICOs, mostly impacting scammers and fraudsters. My only concern is this regulation takes a while to figure out and this kills some momentum.
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- sbenitoj 9y agoGovernmental control of the monetary system (AKA "oversight") is one of the biggest reasons Bitcoin was invented in the first place. The last thing this world needs is more oversight and control by disconnected bureaucrats with no skin in the game. Long-term, however, such attempts at regulating cryptocurrency simply make it even MORE decentralized / antifragile as people stop using traditional exchanges (which can be easily regulated) and start using decentralized options such as LocalBitcoins.com (which is all but impossible to regulate). EDIT: website link
- hnaparst 9y agoIn 2013, China's government declared Bitcoin to be illegal, and Bitcoin crashed from $1,200 to $425. I figured that it would be impossible for Bitcoin to succeed if China outlawed it, so I sold my Bitcoins at $425. I think I was the low trade. Now Bitcoin is at more than ten times that level. Let that story inform your decision making now.
- Taek 9y agoLow trade was $220, and I think that price was late 2015. There was plenty of time to get back in.
- CamelCaseName 9y agoThere might have been plenty of time, but no apparent reason at the time. You can be perfectly rational and wrong.
- hnaparst 9y agoThe moral of the story is not whether I sold at the low or when the low was, or whether there was time to get back in, or when I did get back in. The moral of the story is that one nation's policy is not sufficient to derail bitcoin.
- toephu2 9y agoWhy would anyone base their decision off one anecdotal piece of evidence from a rando on HN? P.S. I sold the 10 bitcoins I mined at $5 (got a $50 amazon gift card). Woulda, coulda, shoulda, e.g., "I should have bought AAPL at $XX".. etc. I don't lose any sleep over those type of situations anymore.
- ezoe 9y agoICO is like stock without the regulation. You offered it without any promise and they buy it. You sell it all so the price goes down and those buyers lost the value. Stock has a lot of regulation based from the many fraud cases. ICO backed by digital currency doesn't have regulation so it's like 15th century when the concept of stock appears without any regulation all over again. Resulting a lot of abuse and fraud.
- gesman 9y agoChina had plethora announcements that western press overhyped as a death to Bitcoin and look where we are. Considering sorry a state of major financial systems on a brink - It's a buying opportunity.
- mjevans 9y agoThis could also be related to China's recent crackdown on VPNs. Eliminating ways to export value without controls by the government, in retrospect, seems like one of the more obvious reasons to control the flow of information. There's suppression of nationally embarrassing facts, but only recently have things actually gotten more serious than providing a high (but climbable) wall.
- jankotek 9y agoIt works opposite way. Bitcoin mining is centralized in China, so firewall would cutoff rest of the world. (it ads latency and makes it harder to announce newly mined blocks)
- subru 9y agoCould be worth a gamble here to short BTC up to 4500 with a tight stop, good r:r. Be wrong quickly if wrong. The current environment looks good for trading.
- subru 9y agoStay long at your own risk, imo. Selling rallies has been the regime for almost a week now.
- subru 9y agoWhy be long here? Are you holding out for a break above 5k that may never come? HN, please listen to me, it's at 4500 and all you have to do is sell.
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