Actually that picture may be a Japanese macaque lazily enjoying a nice hot spring in winter:

https://www.google.com.br/search?q=Japanese+macaque+%22hot+spring%22&source=lnms&tbm=isch&sa=X&ei=zR39UtW9I6PA0QG_h4GQAw&ved=0CAkQ_AUoAQ&biw=1299&bih=854

EDIT: And this is real life: http://www.telegraph.co.uk/culture/culturepicturegalleries/8899736/75-years-of-Life-magazine.html?image=12

OK, I'll bite:

  "Our exchange did not have the MtGOX bug, we have promptly removed it, we are suspending withdrawals briefly in order to remove it, and we are confident that we will not be affected by it once the community figures out how to fix it." 

 

My DNS must have been hacked, because I look at the charts and see nothing out of the ordinary. 

Are people really alarmed because Bitstamp fell a mere 30$?

It only moves Yuan from a Chinese pocket to other Chinese pockets.  The total amount of Yuan in China remains the same.

Most Governments dislike their currency being exported because any foreign bank or government that gathers enough of it can manipulate their exchange rates, import/export balance,  and inflation.   Some governments try hard to limit export of their currency, others may just live with it, others may have other motives to encourage it.

Yes, the price of bitcoins will go up (if it is not offset by speculators dumping).

But we were discussing "capital evasion", not price; and I showed that using bitcoins as the Forbes article described does not amount to capital evasion; rather the opposite.  That is why the Chinese government has not tried to stop it.

With the current internal restrictions, prices, and mining activity, I believe that bitcoin is siphoning real wealth from the rest of the world to China.  But not much - much less than a million dollars per day, I woudl say.

...before the Chinese government banned its use in commerce.  The "believers" probably left at that point, leaving only the speculators, with the obvious effect on the price.


Yes, and that is what I mean.  Except for a few who can use bitcoin while traveling abroad, most Chinese cannot use their bitcoins as currency, and have no expectation of doing so.  So, why would they put their real money into bitcoins, and hold on to them?

Note that the article was written before the Chinese stomped on bitcoin.

But even if nothing had changed, there is one little snag in that article.  If a Chinese citizen uses Yuan to buy bitcoins in China and then sells them for dollars in the US, there is no export of Yuan to the US actually.  Instead the guy gives his Yuan to other Chinese traders, and the US traders give him a bunch of dollars. 

So why would the Chinese government object to a Chinese national receiving a gift from americans?

Sure, after that transaction there would be fewer bitcoins in China and more bitcoins in the US.  But since bitcoins have no intrinsic value, the material wealth of China would not change. There would be still the same amount of food and cars in the Chinese market, and the same amount of Yuan in circulation inside China.

If bitcoins could be used to buy things in China, there might be some Yuan inflation as the bitcoins became scarce and the Yuan lost value relative to them.  But that is why the government banned their use in commerce.

I wonder what the Chinese investors expect from Bitcoin.

Since their government has banned the use of cryptocoins as currency, they cannot possibly believe in the old spiel: "One day there will be no Yuan, only bitcoins; so divdiding A by B it is obvious that each bitcoin will be worth a fortune".  They know that bitcoin will "never" be used for payments, much less replace the Yuan.

So, I suspect that there are no "hodlers" in China, except perhaps some ignorant guys who have been told just the conclusion of that spiel, and believed it without understanding why.

I suspect that practically all the investors in China see bitcoin only as a suitable speculation object, and look forward only to its price rising just enough and soon enough for them to make a good profit -- in Yuan.

For them, bitcoin trading itself must be just a form of gambling.

How many coins are being mined these days?   At the price they would fetch outside China, would they be enough for significant evasion?

I don't think that those coins would be easy or safe to get. How would the evaders contact the miners and pay them?  Big miners have large installations and huge electricity bills, they cannot easily hide from the government.

PS. I think that the only really bad news for bitcoin iinvestors that I have seen in the last few months were these two lines in the recent interview of Huobi's CEO:

  "We’ll evaluate the virtual currencies’ general market value and its circulation to decide whether to include [other cryptocoins]. Litecoin is in our plan. We need more observation of the situation of Dogecoin."

http://forexmagnates.com/exclusive-interview-ceo-of-largest-bitcoin-exchange-in-the-world-huobi-responds-to-mt-gox-situation/

Is it?  Basically the only way to convert Yuan to/from Bitcoin now is through a Chinese bank.  Both the bank and the exchange will want your ID. 

What do you mean exactly by "evading capital controls and State restrictions"?

Most of the good news (and bad news) that I have seen posted here mean nothing to the typical investor. (Overstock now accepts bitcoins? What is Overstock?)

Many investors will ignore news and just watch the price charts. The panic selling on feb/10, for example, may have been 1% investors reacting to "really bad news" (Karpeles's release stating that the protocol was broken), and 15% investors panicking because they saw the price drop fast after those 1% dumped their coins.

Those investors who understand the good news will also understand that they are not that exciting really.  (Overstock USA now accepts payment in USD from US customers through Bitpay? So what?)

Prices went up when more people invested in bitcoins, went down when investors dumped them.  Most new investors were attracted by the promise of quick and huge gains.  Many got scared off by government warnings and restrictions, many got disillusioned by the december crash, stagnating prices, and personal losses in trading.

A speculator who profits at trade will stay in the game, but probably will have no additional money to bring in.  A speculator who loses money is likely to dump his coins and take what is left of his money out.  News will matter little in both cases.  Thus, without new investors, the price is more likely to decay slowly than to increase.

Well, one can see from the hourly volume charts at bitcoinwisdom that Huobi's clients start trading around 07:00 06:00 am Beijing time and stop around 02:00 01:00 am.  There is almost zero trade between 03:00 02:00 am and 06:00 05:00 am.

One can also see that they sleep trade until later on certain days and wake up somewhat later the next day.

OKCoin's volume varies in a daily cycle but does not stop completely at night. Either their clientele is more scattered, or there are unsupervised robots trading there.

But anyway it seems that the whole of China is a single time zone, even though it would normally span several times 15 degrees.  It makes economic sense to synchronize working hours over the whole country, but I do not know whether they sync their sleep hours too.

EDIT: fixed local times (UTC+08:00 not UTC+09:00)

Indeed, no one seems to be looking at them. There seems to be some strong ideological/religious/wishful-thinking barrier that prevents people from even considering the possibility that China might be relevant to the evolution of prices in other markets.


Exactly!

For example, banks were closed in China from jan/30 to feb/05; the Chinese could not get money into or out of the exchanges, so the price at all exchanges in the world (except broken ones like MtGOX and BTC-China) stagnated for that whole week.

Then banks reopened feb/06 or feb/07, and the Chinese could take money out of their exchanges.  Coincidentally, the price at all exchanges in the world started to fall in sync.

Actually, since April last year the price of bitcoin at all exchanges in the world has been almost entirely determined by the Chinese investors.  There is no other plausible explanation for the rallies that have lifted the price from 17 US$ to 1100 US$, then crashed it and recovered it to the present value.

If one day the Chinese lose interest in bitcoin and take their money out of the market, the price will probably fall back to double digits as it was before the Chinese stepped in.


Actually there is only a finite amount of money that could go in, and a practically infinite number of crypto-coins that can go in.  That is one of the many reasons why am skeptical of bitcoin's success.

I suppose that the case of MtGOX (and Bitstamp and BTC-e to a lesser extent) alerted many investors of the risk of leaving all of one's bitcoins stored at the exchange, and/or of using outdated versions of the wallet software.  Many probably did not even have a private wallet (unless the exchange required one to open their account).

China has more investors than other countries, it seems, so it is expected that they would make more downloads.

And, while they sleep, the rest of the world just sits there, wondering what will happen next. 

Among the exchanges listed by Bitcoinwisdom:

Trade volume on Tuesday Feb/12 was slightly higher than yesterday's in China, and about half of yesterday's outside China.

MtGOX had the highest volume outside China (~25 kBTC).  (I wonder how much of that volume is newbies sending fresh money to MtGOX to buy their cheap BTCs, only to learn that they cannot take the BTC out and cannot have their money back.  The community must warn everybody to stay away from MtGOX.)

Volumes at Bitstamp, Bitfinex and BTC-e were about 1/3 of yesterday's

Huobi's volume was ~132 kBTC, more than twice OKCoin's and twice that of all non-Chinese exchanges combined.

BTC-China had ~11 kBTC traded, but their price charts still look rather strange.

China had 3/4 of the total volume.

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


             !   Mon !   Tue !   Wed !    Thu !    Fri !    Sat !    Sun !    Mon !    Tue !    Wed !                     
  EXCHANGE   ! 02/03 ! 02/04 ! 02/05 !  02/06 !  02/07 !  02/08 !  02/09 !  02/10 !  02/11 !  02/12 ! Currencies considered

  MtGOX      |  3.37 |  5.40 |  8.20 |  21.54 |  58.89 |  26.82 |  23.48 |  50.07 |  18.70 |  25.21 | USD,EUR,GBP,AUD,JPY 
  Bitstamp   |  4.93 |  7.59 |  8.48 |  20.65 |  42.79 |  13.50 |  15.06 |  71.86 |  40.06 |  15.51 | USD                 
  BitFinEx   |  3.45 |  3.36 |  5.22 |  21.11 |  66.36 |  11.12 |  12.07 |  41.98 |  39.54 |  12.85 | USD                 
  BTC-e      |  5.75 |  4.51 |  6.55 |   9.72 |  31.84 |  11.67 |  12.51 |  47.04 |  28.64 |   9.97 | USD,EUR,RUR         
  Kraken     |  0.21 |  0.29 |  0.23 |   0.59 |   1.45 |   0.37 |   0.45 |   1.45 |   1.11 |   0.58 | EUR                 
  Bitcoin.DE |  0.51 |  0.27 |  0.31 |   0.61 |   1.30 |   0.37 |   0.47 |   1.54 |   0.67 |   0.51 | EUR                 
  CaVirtEx   |  0.08 |  0.17 |  0.18 |   0.39 |   1.07 |   0.57 |   0.23 |   0.77 |   0.53 |   0.29 | CAD                 
  CampBX     |  0.10 |  0.12 |  0.16 |   0.21 |   0.82 |   0.27 |   0.24 |   0.37 |   0.11 |   0.10 | USD                 

  SUBTOTAL   | 18.40 | 21.71 | 29.33 |  74.82 | 204.52 |  64.69 |  64.51 | 215.08 | 129.36 |  65.02 |                     

  Huobi      | 24.77 | 18.65 | 19.55 |  39.97 | 131.91 |  77.00 |  64.08 | 134.09 | 120.08 | 131.86 | CNY                 
  OKCoin     | 18.09 | 12.77 | 12.33 |  26.07 |  74.37 |  37.63 |  34.63 |  70.49 |  64.22 |  60.79 | CNY                 
  BTC-China  |  1.70 |  1.33 |  1.54 |   4.09 |  17.66 |   6.86 |   5.75 |  18.23 |  11.17 |  11.01 | CNY                 

  SUBTOTAL   | 44.56 | 32.75 | 33.42 |  70.13 | 223.94 | 121.49 | 104.46 | 222.81 | 195.47 | 203.66 |                     

  TOTAL      | 62.96 | 54.46 | 62.75 | 144.95 | 428.46 | 186.18 | 168.97 | 437.89 | 324.83 | 268.68 |                     



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Coinbase is said to use Bitstamp for currency conversion.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

The exchange Crypto-Trade was dropped from Bitcoinwisdom's charts on Feb/10.  Its volume used to be around 10 BTC/day.

The periods of extreme volatility in the last two weeks have occurred while Huobi is awake.  The good/bad news reported here do not seem to affect Huobi's prices, especially at slumber times.  (Why should they?)

At Huobi, since jan/30, the only breaks in the yellow dots trend that seem significant are

* feb/06 to feb/07 - (banks opening) the trend of the yellow dots changed from constant to shifted decaying exponential, without a break.

* feb/09 to feb/10 - (MtGox release) there was a sudden drop in the trend line . The shape of the new trend is not clear yet.

These two events also changed the currency conversion factor R relating the Huobi yellow dots to Bitstamp prices at the same times (from ~6.12 to ~6.40 and then apparently back to ~6.12)

Predictions for Thursday Feb/13 at 19:00--19:59 UTC (not earlier, not later):

Huobi:  3970 plus or minus 30 CNY (3940 -- 4000)
Bitstamp:  650 plus or minus 10 USD (640 -- 660)

I used the Chinese Slumber Method described in my previous posts, extrapolating linearly from the two Slumber Points of Feb/10 and feb/12. (The feb/11 point seems to be unreliable as discussed before.)

For the Bitstamp prediction, I assumed a currency conversion factor of 6.12 -- which was valid at Slumber Times up to feb/06, and appears to be valid again since feb/10.