8 ms·

Bitcoin Value Sinks After Chinese Exchange Move

83 points by mjfern 13y ago

MattyRad 13y ago
>"It is not issued by a central monetary authority, it does not have the properties of legal currency and it is not a currency in the real meaning of the word." Certainly an amusing quote, given the extensive actions to stop the spread of such a non-threatening non-currency. By "ban", I assume they mean "made illegal." The former of course being a euphemism for the latter. A couple questions come to my mind as such.... How will China enforce such a ban? Can China physically or technologically bar access to Bitcoin deposits? Regardless of the Chinese government's ability to effectively enforce such a ban, the price of Bitcoin has taken a noticeable dive.
- ekianjo 13y ago
  > the price of Bitcoin has taken a noticeable dive. Don't judge on one day. Wait for a week, 10 days before making conclusions on the price of Bitcoin. Bitcoin has shown to be pretty resilient to news that were considered bad by the media. We'll see.
  - taspeotis 13y ago
    > Wait for a week, 10 days before making conclusions on the price of Bitcoin My conclusion is that it's pretty fucked up [1]. Nov 15 $US430 Nov 22 US$843 Nov 29 US$1137 Dec 6 US$552 Dec 13 US$869 Dec 18 US$584 Pick one of those dates before today and imagine saying "wait for a week ... before making conclusions on the price of Bitcoin". [1] https://coinbase.com/charts https://coinbase.com/charts
    - ekianjo 13y ago
      Interesting, you already have the dec 18 value while the day is far from over. You have a strange way to pick up numbers.
      - oe 13y ago
        That price seems way high indeed. But I think the point still stands.
      - taspeotis 13y ago
        It's down to ~480 so it's lost $100 in 30 minutes. Let's just say that my strange way of picking numbers can be described as "flattering" ... at worst.
        BrokenPipe 13y ago
        Today I've seen it back at 530 and now at 520. Who knows, I wouldn't be surprised if by EOB we're back above 600. As parent said, with Bitcoin you have to look at things in a different way since it works in a very different way than anything else we've ever seen.
        ohashi 13y ago
        But does it really? It looks like rampant speculation to me. I've seen that many times in markets.
        BrokenPipe 13y ago
        Have you seen before a functioning globally distributed ledger system being speculated on in the markets ?
        ohashi 13y ago
        Have you seen a <insert something that for some reason it will be different this time thing here> is generally a poor argument. But one speculators cling to and try to convince others of adamantly.
        ekianjo 13y ago
        No, you should pick numbers on a daily average with an indication of the daily variation on the value if you want to be fair, not at a precise instant, because Bitcoin can have as much as 30% variation in a given day, so I too can make up numbers out of thin air by picking up a very biased time during the day.
    - Aqueous 13y ago
      Wait for a year. Two years. Three years.
  - deleted 13y ago
    [deleted]
Fuxy 13y ago
China is afraid. Bit-coin is an unregulated way of moving money out of China and they are known for keeping the movement of money in and out of china under very strict control. The only way of regaining this control is by forcing all major companies to ban bit-coin. You think the companies are happy about this they were making a very nice profit from the transactions.
- seanmcdirmid 13y ago
  Right. China still has currency controls on the RMB. Makes it a pain for me to move it out of China en masse, not that I've tried yet.
- 3pt14159 13y ago
  Bitcoin is spelled without a hyphen.
- yongjik 13y ago
  If you find an ant taking a crumb of bread from under your table you aren't afraid. You're annoyed. Let's not lose perspective here.
- baddox 13y ago
  It's obviously a matter of controlling the flow of money (or capital in general). I fail to understand how anyone thinks this demonstrates a flaw or shortcoming of Bitcoin.
master_shake 13y ago
In April, I watched the price of bitcoin every day. When it approached $200 I said "f*ck it," took out a student loan and bought in at $225. The VERY NEXT DAY the price collapsed. I watched bitcoin slide to $50 in a state of complete and utter devastation. I felt so stupid. I decided not to sell, and just considered the loan to be a write-off. Point being, you should assess the quality of your investment in years, not hours. And in regards to the Chinese government, allow me to quote Mahatma Gandhi: > first they ignore you, then they laugh at you, then they fight you, then you win.
- grey-area 13y ago
  Should a currency be an investment?
  - greghinch 13y ago
    Currency speculation is a risky but thriving market
    - grey-area 13y ago
      Speculation is not the same as investing. You can speculate in currency fluctuations in any currency, but to refer to a currency as an investment is a huge red flag for it as a currency, and for investment assets you should prefer slow appreciation over wild fluctuations and speculative moves.
      - deleted 13y ago
        [deleted]
      - twelvechairs 13y ago
        investment and speculation are two sides of the same coin (pardon the pun). all investment has risk. bitcoin speculation is a high risk investment. this may not be good for everyone but its an investment nonetheless.
        deleted 13y ago
jasonlingx 13y ago
Wow, this has really got the attention of the Chinese authorities. This only alludes to how incredibly disruptive bitcoin is going to be. Time to go all-in if you haven't already...
- jaibot 13y ago
  > Time to go all-in if you haven't already... If every possible outcome confirms your hypothesis, you are not considering the evidence properly. If China hadn't moved against Bitcoin, would you think that would make Bitcoin a less attractive speculation?
  - celticninja 13y ago
    going all in is probably not adviseable in any technology investment, but I get his point, the Chinese Government see bitcoin as a way that its citizens can circumvent currency controls and it also affects the exchange rate of the RMB, which is very closely controlled byt he Chinese Government. This doesnt mean that bitcoin is "going to the moon" this means that as a disruptive technology it is making itself known and coming up against predictable barriers. The comment you responded to was a bit "buy buy buy" but the sentiment is just another way of saying "first they ignore you, then they laugh at you, then they fight you, then you win"
    - jaibot 13y ago
      That sentiment is also often a way to cover for the incoherent belief "P(A|B) > P(A|-B) > P(A|B)".
      - exit 13y ago
        can you expand that for us? what are A and B?
        jaibot 13y ago
        Any proposition, where A is the thing you want to believe and B/not-B are observations - it's a slightly tongue-in-cheek attempt to mathematically represent the idea that no matter what you see it confirms that you're right.
fsckin 13y ago
After the peak of $1100 and being pretty happy last week, and the subsequent decline, I sold my stash at $800 last week, no regrets.... yet. Probably a great time to buy.
- SamReidHughes 13y ago
  > Probably a great time to buy. Why?
  - ivanplenty 13y ago
    > Probably a great time to buy. He or others like him may not have sold off all of their coins and need dumb money to keep the price afloat just a little longer... If it were a great time to buy, he would have. Follow the actions and not the words in markets like this.
    - writtles 13y ago
      I've been investing long enough to know that: 1) if a disruptive tech has plenty of personal intrigue and 2) plenty of brilliant people herald it then buy the crash.
  - sickpig 13y ago
    He thinks that the price is near or at the bottom, I suppose.
    - fsckin 13y ago
      Yep.
      - hayksaakian 13y ago
        ~ 30 day low at the moment
  - smtddr 13y ago
    It's possible, but not too likely at all at this point, that China will reverse this decision. I don't know how far BTC will fall, but let me tell you this. If it falls to under $10 like this person[1] says, I'm going all in... $5,000 USD's worth because I'm a fool. If, by some improbable & unfeasible way, China does reverse and BTC reaches $1,000+ again my cheers will be so loud that everyone on HN will actually hear me. 1. http://www.businessinsider.com/williams-bitcoin-meltdown-10-2013-12 http://www.businessinsider.com/williams-bitcoin-meltdown-10-...
deleted 13y ago
[deleted]
killerpopiller 13y ago
I came here for some opinions on where the dive ends. Will we see the BT under 200$?
- tlrobinson 13y ago
  Comparison to previous bubbles (with standard disclaimer about past performance not being an indicator of future results): http://m.imgur.com/i5w3yPj http://m.imgur.com/i5w3yPj $200 is certainly possible, if not likely.
- forgotmycreds 13y ago
  If you look long enough you can see the end of all things. Bitcoins, I as an outsider have to say that many people will be tempted to buy because of the low price. This low price is being advertised by lots of people as a reason to buy, probably trying to mask the news of China not allowing the business. What big economy has accepted bitcoin as a currency? Edit: What reason is there to be optimistic about the bitcoins.
erdoserdoserdos 13y ago
Unregulated capital flight is really not a feature of Bitcoin. Bitcoin is money with the ledger built into it. It's not for hiding wealth, but for tracking it. This is a market correction that had to take place. People get confused right now because the ledger is more or less blank. It won't be. (As a slightly dystopian side note, BTC with very little history may become very very valuable.) In the future, it is going to be preferable to pay for anything large with cryptocurrency. It's overkill to buy a coffee with Bitcoin. But a house, a car, maybe even rent? What better way to prove you own or have paid for something? The currency knows when and how it was used. We currently live in a world where banks try to foreclose on homes that aren't even mortgaged. Bitcoin and the like will end that. But even more importantly, Bitcoin is about wealth protection. The average Joe will have very little of the deflationary income. But large banking institutions will.
- lukifer 13y ago
  Altcoins with faster transaction times and built-in inflation formulas could change the game. I'm bullish on crypto-currency in general, but I don't think it's a given that BitCoin is guaranteed to be the winner, long-long-term. > BTC with very little history may become very very valuable. Unpack this? I had thought that if you sent coins to a fresh wallet ID, it becomes effectively anonymous. (I've heard of some who generate a new public key for every transaction.)
  - Anderkent 13y ago
    > Unpack this? I had thought that if you sent coins to a fresh wallet ID, it becomes effectively anonymous. Not really, you can see where the money came from, and assume the same owner (or a relationship between the owners). To anonymize bitcoins you have to 'mix' them - take X bitcoins from N people, send them to a single address, then send X to new addresses for each of the N people. Because any persons bitcoins might end up going to someone else, you cannot assume it's the same person or a transaction any more.
- btbuildem 13y ago
  > BTC with very little history may become very very valuable Why would a virgin coin be more valuable than one that has passed through countless wallets? What is the advantage?
jackgavigan 13y ago
Predictable outcome is predictable: https://news.ycombinator.com/item?id=6818821 https://news.ycombinator.com/item?id=6818821 Anyone who thought the Chinese government were going to ignore a mechanism that allowed people to bypass capital controls with impunity was pretty naive. Bitcoin fanboys have classic tunnel vision - they're so enamoured of the libertarian ideal of an anonymous crypto-currency that's not controlled by any government, that they ignored all the practical, economic and legal challenges it would need to overcome before it could become a real currency. It's a bit like the people who watched the moon landings on TV and believed that we'd have moonbases by the end of the 20th century. Technology needs time to develop and mature, and there typically needs to be a compelling commercial case for its adoption. The technological principles that underpin Bitcoin will see more widespread adoption within the next few years but they'll be deployed within the pre-existing financial context, perhaps as a mechanism for OTC trading or to support real-time gross settlement in the wholesale markets. In the retail market, I envisage an M-Pesa-style digital payments/money-transfer solution that complements the the traditional banking and payments systems. We might see alternative currencies built on Bitcoin-style infrastructures but based on something that people value in a different way from dollars and cents (e.g. the rainforest). But Bitcoin itself is too flawed from an economic perspective, too inefficient and too big a step to be able to function effectively as a currency within the current AML/sanctions-focused regulatory environment.
- baddox 13y ago
  Why are you patting yourself on the back for one of the most obvious predictions imaginable? What's next, a brilliant prediction that if the US government bans electric cars, Tesla's stock will crash?
- johndevor 13y ago
  I think the comparison to moon bases is a little dramatic. The infrastructure exists already for Bitcoin, and there is a thriving Bitcoin ecosystem. Whether or not it continues to grow is the question.
  - nwzpaperman 13y ago
scotty79 13y ago
Awesome. I have a little regret that I wasn't brave enough to sell at $1000. But then I'd have to decide when to buy and I'd probably chicken out and already buy for something like 800$. And I'd be risking the scenario I'm most afraid of that I get stuck without bitcoins and I can buy much less of them because the prize never goes below for what I sold them.

83 points by mjfern 13y ago

>"It is not issued by a central monetary authority, it does not have the properties of legal currency and it is not a currency in the real meaning of the word." Certainly an amusing quote, given the extensive actions to stop the spread of such a non-threatening non-currency. By "ban", I assume they mean "made illegal." The former of course being a euphemism for the latter. A couple questions come to my mind as such.... How will China enforce such a ban? Can China physically or technologically bar access to Bitcoin deposits? Regardless of the Chinese government's ability to effectively enforce such a ban, the price of Bitcoin has taken a noticeable dive.

ekianjo 13y ago
> the price of Bitcoin has taken a noticeable dive. Don't judge on one day. Wait for a week, 10 days before making conclusions on the price of Bitcoin. Bitcoin has shown to be pretty resilient to news that were considered bad by the media. We'll see.
- taspeotis 13y ago
  > Wait for a week, 10 days before making conclusions on the price of Bitcoin My conclusion is that it's pretty fucked up [1]. Nov 15 $US430 Nov 22 US$843 Nov 29 US$1137 Dec 6 US$552 Dec 13 US$869 Dec 18 US$584 Pick one of those dates before today and imagine saying "wait for a week ... before making conclusions on the price of Bitcoin". [1] https://coinbase.com/charts https://coinbase.com/charts
  - ekianjo 13y ago
    Interesting, you already have the dec 18 value while the day is far from over. You have a strange way to pick up numbers.
    - oe 13y ago
      That price seems way high indeed. But I think the point still stands.
    - taspeotis 13y ago
      It's down to ~480 so it's lost $100 in 30 minutes. Let's just say that my strange way of picking numbers can be described as "flattering" ... at worst.
      - BrokenPipe 13y ago
        Today I've seen it back at 530 and now at 520. Who knows, I wouldn't be surprised if by EOB we're back above 600. As parent said, with Bitcoin you have to look at things in a different way since it works in a very different way than anything else we've ever seen.
        ohashi 13y ago
        But does it really? It looks like rampant speculation to me. I've seen that many times in markets.
        BrokenPipe 13y ago
        Have you seen before a functioning globally distributed ledger system being speculated on in the markets ?
        ohashi 13y ago
        Have you seen a <insert something that for some reason it will be different this time thing here> is generally a poor argument. But one speculators cling to and try to convince others of adamantly.
      - ekianjo 13y ago
        No, you should pick numbers on a daily average with an indication of the daily variation on the value if you want to be fair, not at a precise instant, because Bitcoin can have as much as 30% variation in a given day, so I too can make up numbers out of thin air by picking up a very biased time during the day.
  - Aqueous 13y ago
    Wait for a year. Two years. Three years.
- deleted 13y ago
  [deleted]

Fuxy 13y ago

China is afraid. Bit-coin is an unregulated way of moving money out of China and they are known for keeping the movement of money in and out of china under very strict control. The only way of regaining this control is by forcing all major companies to ban bit-coin. You think the companies are happy about this they were making a very nice profit from the transactions.

seanmcdirmid 13y ago
Right. China still has currency controls on the RMB. Makes it a pain for me to move it out of China en masse, not that I've tried yet.
3pt14159 13y ago
Bitcoin is spelled without a hyphen.
yongjik 13y ago
If you find an ant taking a crumb of bread from under your table you aren't afraid. You're annoyed. Let's not lose perspective here.
baddox 13y ago
It's obviously a matter of controlling the flow of money (or capital in general). I fail to understand how anyone thinks this demonstrates a flaw or shortcoming of Bitcoin.

master_shake 13y ago

In April, I watched the price of bitcoin every day. When it approached $200 I said "f*ck it," took out a student loan and bought in at $225. The VERY NEXT DAY the price collapsed. I watched bitcoin slide to $50 in a state of complete and utter devastation. I felt so stupid. I decided not to sell, and just considered the loan to be a write-off. Point being, you should assess the quality of your investment in years, not hours. And in regards to the Chinese government, allow me to quote Mahatma Gandhi: > first they ignore you, then they laugh at you, then they fight you, then you win.

grey-area 13y ago
Should a currency be an investment?
- greghinch 13y ago
  Currency speculation is a risky but thriving market
  - grey-area 13y ago
    Speculation is not the same as investing. You can speculate in currency fluctuations in any currency, but to refer to a currency as an investment is a huge red flag for it as a currency, and for investment assets you should prefer slow appreciation over wild fluctuations and speculative moves.
    - deleted 13y ago
      [deleted]
    - twelvechairs 13y ago
      investment and speculation are two sides of the same coin (pardon the pun). all investment has risk. bitcoin speculation is a high risk investment. this may not be good for everyone but its an investment nonetheless.
      - deleted 13y ago

jasonlingx 13y ago

Wow, this has really got the attention of the Chinese authorities. This only alludes to how incredibly disruptive bitcoin is going to be. Time to go all-in if you haven't already...

jaibot 13y ago
> Time to go all-in if you haven't already... If every possible outcome confirms your hypothesis, you are not considering the evidence properly. If China hadn't moved against Bitcoin, would you think that would make Bitcoin a less attractive speculation?
- celticninja 13y ago
  going all in is probably not adviseable in any technology investment, but I get his point, the Chinese Government see bitcoin as a way that its citizens can circumvent currency controls and it also affects the exchange rate of the RMB, which is very closely controlled byt he Chinese Government. This doesnt mean that bitcoin is "going to the moon" this means that as a disruptive technology it is making itself known and coming up against predictable barriers. The comment you responded to was a bit "buy buy buy" but the sentiment is just another way of saying "first they ignore you, then they laugh at you, then they fight you, then you win"
  - jaibot 13y ago
    That sentiment is also often a way to cover for the incoherent belief "P(A|B) > P(A|-B) > P(A|B)".
    - exit 13y ago
      can you expand that for us? what are A and B?
      - jaibot 13y ago
        Any proposition, where A is the thing you want to believe and B/not-B are observations - it's a slightly tongue-in-cheek attempt to mathematically represent the idea that no matter what you see it confirms that you're right.

fsckin 13y ago

After the peak of $1100 and being pretty happy last week, and the subsequent decline, I sold my stash at $800 last week, no regrets.... yet. Probably a great time to buy.

SamReidHughes 13y ago
> Probably a great time to buy. Why?
- ivanplenty 13y ago
  > Probably a great time to buy. He or others like him may not have sold off all of their coins and need dumb money to keep the price afloat just a little longer... If it were a great time to buy, he would have. Follow the actions and not the words in markets like this.
  - writtles 13y ago
    I've been investing long enough to know that: 1) if a disruptive tech has plenty of personal intrigue and 2) plenty of brilliant people herald it then buy the crash.
- sickpig 13y ago
  He thinks that the price is near or at the bottom, I suppose.
  - fsckin 13y ago
    Yep.
    - hayksaakian 13y ago
      ~ 30 day low at the moment
- smtddr 13y ago
  It's possible, but not too likely at all at this point, that China will reverse this decision. I don't know how far BTC will fall, but let me tell you this. If it falls to under $10 like this person[1] says, I'm going all in... $5,000 USD's worth because I'm a fool. If, by some improbable & unfeasible way, China does reverse and BTC reaches $1,000+ again my cheers will be so loud that everyone on HN will actually hear me. 1. http://www.businessinsider.com/williams-bitcoin-meltdown-10-2013-12 http://www.businessinsider.com/williams-bitcoin-meltdown-10-...

deleted 13y ago

[deleted]

killerpopiller 13y ago

I came here for some opinions on where the dive ends. Will we see the BT under 200$?

tlrobinson 13y ago
Comparison to previous bubbles (with standard disclaimer about past performance not being an indicator of future results): http://m.imgur.com/i5w3yPj http://m.imgur.com/i5w3yPj $200 is certainly possible, if not likely.
forgotmycreds 13y ago
If you look long enough you can see the end of all things. Bitcoins, I as an outsider have to say that many people will be tempted to buy because of the low price. This low price is being advertised by lots of people as a reason to buy, probably trying to mask the news of China not allowing the business. What big economy has accepted bitcoin as a currency? Edit: What reason is there to be optimistic about the bitcoins.

erdoserdoserdos 13y ago

Unregulated capital flight is really not a feature of Bitcoin. Bitcoin is money with the ledger built into it. It's not for hiding wealth, but for tracking it. This is a market correction that had to take place. People get confused right now because the ledger is more or less blank. It won't be. (As a slightly dystopian side note, BTC with very little history may become very very valuable.) In the future, it is going to be preferable to pay for anything large with cryptocurrency. It's overkill to buy a coffee with Bitcoin. But a house, a car, maybe even rent? What better way to prove you own or have paid for something? The currency knows when and how it was used. We currently live in a world where banks try to foreclose on homes that aren't even mortgaged. Bitcoin and the like will end that. But even more importantly, Bitcoin is about wealth protection. The average Joe will have very little of the deflationary income. But large banking institutions will.

lukifer 13y ago
Altcoins with faster transaction times and built-in inflation formulas could change the game. I'm bullish on crypto-currency in general, but I don't think it's a given that BitCoin is guaranteed to be the winner, long-long-term. > BTC with very little history may become very very valuable. Unpack this? I had thought that if you sent coins to a fresh wallet ID, it becomes effectively anonymous. (I've heard of some who generate a new public key for every transaction.)
- Anderkent 13y ago
  > Unpack this? I had thought that if you sent coins to a fresh wallet ID, it becomes effectively anonymous. Not really, you can see where the money came from, and assume the same owner (or a relationship between the owners). To anonymize bitcoins you have to 'mix' them - take X bitcoins from N people, send them to a single address, then send X to new addresses for each of the N people. Because any persons bitcoins might end up going to someone else, you cannot assume it's the same person or a transaction any more.
btbuildem 13y ago
> BTC with very little history may become very very valuable Why would a virgin coin be more valuable than one that has passed through countless wallets? What is the advantage?

jackgavigan 13y ago

Predictable outcome is predictable: https://news.ycombinator.com/item?id=6818821 https://news.ycombinator.com/item?id=6818821 Anyone who thought the Chinese government were going to ignore a mechanism that allowed people to bypass capital controls with impunity was pretty naive. Bitcoin fanboys have classic tunnel vision - they're so enamoured of the libertarian ideal of an anonymous crypto-currency that's not controlled by any government, that they ignored all the practical, economic and legal challenges it would need to overcome before it could become a real currency. It's a bit like the people who watched the moon landings on TV and believed that we'd have moonbases by the end of the 20th century. Technology needs time to develop and mature, and there typically needs to be a compelling commercial case for its adoption. The technological principles that underpin Bitcoin will see more widespread adoption within the next few years but they'll be deployed within the pre-existing financial context, perhaps as a mechanism for OTC trading or to support real-time gross settlement in the wholesale markets. In the retail market, I envisage an M-Pesa-style digital payments/money-transfer solution that complements the the traditional banking and payments systems. We might see alternative currencies built on Bitcoin-style infrastructures but based on something that people value in a different way from dollars and cents (e.g. the rainforest). But Bitcoin itself is too flawed from an economic perspective, too inefficient and too big a step to be able to function effectively as a currency within the current AML/sanctions-focused regulatory environment.

baddox 13y ago
Why are you patting yourself on the back for one of the most obvious predictions imaginable? What's next, a brilliant prediction that if the US government bans electric cars, Tesla's stock will crash?
johndevor 13y ago
I think the comparison to moon bases is a little dramatic. The infrastructure exists already for Bitcoin, and there is a thriving Bitcoin ecosystem. Whether or not it continues to grow is the question.
- nwzpaperman 13y ago

scotty79 13y ago

Awesome. I have a little regret that I wasn't brave enough to sell at $1000. But then I'd have to decide when to buy and I'd probably chicken out and already buy for something like 800$. And I'd be risking the scenario I'm most afraid of that I get stuck without bitcoins and I can buy much less of them because the prize never goes below for what I sold them.