* * *
Last week bitcoin plunged over 40% from all time highs hit as recently as three weeks ago on news that China had ordered local exchanges to halt trading in the cryptocurrency. Since then, defying naysayers yet again, bitcoin staged a remarkable comeback, rising from under $3000 to $4000 in the last few days of trading, but China appears to be nowhere near done, and as the WSJ reports this morning, Beijing is moving toward a “broad clampdown on bitcoin trading, testing the resilience of the virtual currency as well as the idea its decentralized nature protects it from government interference” in what the paper dubs the “most draconian measures any government has taken to control bitcoin.“
The revelation that the People’s Bank of China (PBoC) will ban–or at least severely restrict–bitcoin exchanges from operating within the country has captured the focus of the cryptocurrency community over the past week and led to intense volatility within the markets. However, as many people have pointed out on Twitter, China has a long history of censoring even the most bizarre things, so it should not be surprising that the government is cracking down on a technology that threatens its power to control the economy. In that spirit, here are seven ridiculous things China has banned–other than bitcoin exchanges.
H/t reader squodgy:
“Ethereum or Bitcoin?
Remember that ETHEREUM is sponsored by Global Corporations & Banks to challenge Bitcoin, so it makes sense yid owned CNBC comes out in favour.”
* * *
Update: one reason given for the sharp, 15% rebound in cryptocurrencies from this morning’s lows, is that according to Caixin, China has give two of the largest Chinese exchanges, Huobi and OKCoin until the end of October before closing. As Bloomberg notes, China’s Regulator has given Huobi.com and OkCoin the extra month to prepare closure, as the two exchanges’ trading platforms and investor base are relatively large, and they never dealt with controversial Initial Coin Offerings, or ICOs. More Google translated from Caixin:
the two platforms … had not done ICO or on-line coins, so the relevant departments decided to give Huobi and OKCoin 1 month time buffer Period, that is to say to the end of October and then shut down, but the specific program is still under study.
Additionally, Caixin adds that the regulator is still studying details of the exchange halt plan.
Could this be indicative of China getting cold feet over the exchange ban? It is unclear, although judging by the sharp snapback in cryptocurrencies, quite a few people appear to believe so.
* * *
H/t reader squodgy:
“As I thought.
How can we trust people like this? And do they care?”
* * *
Update: Confirming the other speculation, that China would halt all cryptocurrency exchange, Yicai reports that it is not just BTC China:
- CHINA MAY SHUT ALL LOCAL BITCOIN EXCHANGES BY SEPT. END: YICAI
To which the response from the Bitcoin Association of Hong Kong is: “if China restricts growth in bitcoin” it will drive business to us”
* * *
Yuan-denominated Bitcoin has crashed as much as 25% 35% in Chinese trading, plunging from 25,000 yuan to as a low of 16,000 on local exchanges BTCChina (and as low as 20,000 on OKCoin), following confirmation of last week’s Caixin report that Beijing would stop cryptocurrency exchange trading. China’s second largest exchange, BTC China, said that it would halt all trading on the platform beginning September 30, launching a liquidation panic.
One day after Jamie Dimon slammed bitcoin, sending its price reeling after he called the cryptocurrency “fraud”, warning it “won’t end well”, and threatening to fire any JPMorgan trader caught trading bitcoin “for being stupid” (a move some dubbed diplomatic genius as JPM’s 20% guide down in trading revenues got zero mentions yesterday) JPMorgan has released its unofficial guide on bitcoin. While that was perhaps to be expected as we are confident the bank was flooded with phone calls from clients who were long the best performing asset class of the year, if not decade, what is much more surprising is who the author of said report was: none other than JPM’s notorious quant guru, Marko Kolanovic, who simply asks “are cryptocurrencies a new asset class or a pyramid scheme?”
While we know how Jamie Dimon feels, Kolanovic’s conclusion is less draconian, if mostly along the skeptical lines of his boss’ thinking: “While we don’t know whether the price of cryptocurrencies will go up or down in the near-term, the history of currencies, governments and financial fraud tells us that the future for cryptocurrencies will likely not be bright.”
Here is the full report from JPMorgan:
Surprised by the sudden air pocket below bitcoin? Curious if this was caused by some new, unconfirmed Chinese crackdown on bitcoin traders, exchanges, and other money launderers?
No, the answer is Jamie Dimon, who in an angry outburst during the same conference in which he preannounced JPM’s 20% trading revenue drop, lashed out at the cryptocurrency, calling it a “fraud” which is “worse than tulip bulbs. It won’t end well”, will “blow up” and “someone is going to get killed.” Oh, and in conclusion, “any trader trading bitcoin” will be “fired for being stupid.”
- DIMON: BITCOIN IS A “FRAUD”; “WORSE THAN TULIP BULBS”
- DIMON: BITCOIN WILL EVENTUALLY BLOW UP
- DIMON: BITCOIN WON’T END WELL
- DIMON: WOULD FIRE ANY TRADER TRADING BITCOIN FOR BEING STUPID
So how does Jamie really feel?
Of course, if “a trader” bought $100,000 of Bitcoin in 2010, they’d be roughly 3x richer than billionaire Jamie, but that’s another story.
What is more surprising, is that bitcoin actually reacted to this angry outburst by the JPM CEO, sliding sharply, and dragging the entire cryptocurrency space with it.
Or perhaps not surprising at all as hundreds of JPM traders quietly liquidated their accounts moments after hearing Dimon’s threat…
Interest in Bitcoin is red hot at the moment. It’s impossible to open a website, listen to a podcast, or watch a video in the financial space without hearing about the meteoric rise in the price of Bitcoin.
Maybe you know a “Bitcoin millionaire” who bought five hundred Bitcoins a few years back for $50,000 and is now sitting on a Bitcoin fortune worth over $2,000,000. It’s true, those people actually do exist.
Yet the crypto-hysteria is distracting you from a scary truth no one is talking about.
H/t reader kevin a.