I repeat: every move of the price since Oct/2013 correlates with events in China, starting with the opening of the Mainland Chinese market a couple of months before. The crash of early december, the recovery in late decenber/january, the decline since february - all can be explained with China only, with no obvious sign of influence from Western events.

Understandably, bitcoin enthusiasts and entrepreneurs in the West must hate the idea that bitcoin price is set by Chinese speculators, at the mercy of an extremely "statist" foreign government.  How can you promise profits and security to investors in that context?

That came only after the Oct/Nov rally.  By early december there were still many who claimed that MtGOX withrawals were mostly working, only a bit slow.

The dollar withdrawal delays explained why MtGOX prices were 10% higher than those in other exchanges, but they cannot possibly explain the 1000% increase.

I cannot follow that reasoning.  The busting of SR made people realize that bitcoin transactions were not invisible to the FBI at all. How could that have helped other uses?

The "cleansing"of bitcoin's image (which did not actually happen, it is still the "coin of crime" for many people)  cannot possibly explain a rise of 1000% in 2 months.  "Other uses" could not and did not expand that fast.  The Chinese market could and did.

By the way, I still don't know what caused the April/2013 jump.  Some said it was videos on YouTube; perhaps.  Could it have been the opening of the illegal drug market by SilkRoad?  Or was it the initial opening of the non-Mainland Chinese market by BTC-China?

No, only that the "positive" things that happened outside China had very small effect, because they were relevant to only a small part of the market.  Why would the Chinese care about things like Overstock or SMBIT?

Besides, the rise from 100$ to 1000$ took less than 2 months.  What earth-shaking bitcoin developments happened in that interval?

Moreover many of those "positive" things were just vaporware or fizzled, and others had a negative impact when they failed.   

Who are the sponsors?  I saw a page that mentioned a company with apparent Chinese ownership and with ".pe" (Peruvian) domain, but never heard of them before.

The evolution of the BTC price since Oct/2013 can be explained in terms of Chinese events only, and does not seem to react to any events outside China.  Even the Feb/10 drop related to MtGOX was probably due to Mark's claim of a 'bug in the protocol' rather than the dealings of MtGOX itself. 

So it is hard to deny that the rise from ~100$ to ~1000$ and the current ~450$ are entirely due to the Chinese market.  If we consider percentual increase in price, indeed there were comparable bubbles before.  If we consider total demand for BTC, China was about 10x all the previous bubbles combined.

I would guess that the Chinese government has no objections to bitcoin mining and manufacture of mining harware, as long as their products are sold overseas.  On the contrary, they contribute to the country's exports and are therefore good.

I don't know how much we should trust that Chinese businessman's analyses.  (How much would you trust a random American businessman's analysis of the US Government's policy about bitcoin?)

That said, most of it seems to make sense.  Huobi's trade volume is sometimes over 100 kBTC/day which means 50 M$/day, but that is only internal accounting and generates zero revenue.  They may take 1-2% of cash withdrawals, but even with 1 M$/day of withdrawals that would give 20'000 $/day at most.  Is insider trading their real source of revenue?  In any case, their revenue is probably less than that of a typical supermarket.  Would the US Federal Reserve Bank care about the troubles of five US supermarkets?

However, I would guess that money, rather than embarrassment, was the cause of the delays at the bottom of the command chain.  The banks definitely charge a few % for deposits and withdrawals. Several thousand dollars per day may mean nothing for the PBoC, but may quite significant revenue for a single bank branch.  The branch managers would want to keep that revenue coming in as much as they can, I would think.

The exchanges are half a doen small businesses by Chinese standards, I doubt whether the PBoC would get down to discuss policies with them.  (The traded volumes look like a lot of money, but that is just internal accounting; what counts is their revenue from withdrawal fees, and possibly from self-trading or shady plays with customers' coins.)

Also, the squeeze doesn't seem to come from the PBoC anyway, only through it.  Illegal payments and protecting the small investor are the concern of other agencies.  (The PBoC may have objected to leveraged trade perhaps, as it would turn the exchanges into money lending businesses?)

Thanks, but it turned out that the concept had been discovered in the next-to-next-to-last-century already, by Gaspard Monge in 1781, precisely for the problem of moving earth in roadworks:

http://en.wikipedia.org/wiki/Gaspard_Monge
The paper in question seems to be "Sur la théorie des déblais et des remblais" (Mém. de l’acad. de Paris, 1781), but I haven't read it.

See also
http://en.wikipedia.org/wiki/Earth_mover%27s_distance (check the Talk page)

The Russians apparently prefer to give all the honor to the Russian Wasserstein rather than Monge:
http://en.wikipedia.org/wiki/Wasserstein_metric

I don't know whether there is similarity yet. 

FXBTC closed down neatly - stopped deposits, stopped trading, allowed ample time for withdrawals.  Exactly the opposite of MtGOX.

(By blocking withdrawals while allowing deposits and posting a price 10-20% over market, Mark tricked who-knows-many
newbie investors into a trap that he knew would eat their money.  That is NOT mere incompetence, sorry.)

Will Huobi and OKCoin also close down neatly? I find it worrisome that Huobi still has posted no announcement about it on their homepage; the last notice there is still from Apr/17.

Are they BTC and/or CNY solvent?  I would rather think so, MtGOX's collapse should have been a clear lesson.   If they are insolvent, however, they will may have to block withdrawals early and without warning, and then their CEOS will probably be in deep trouble. 

Sudden collapses may actually be the best scenario for the price, since it will decouple those exchanges from the market before all their BTC balances are taken out.  If they are solvent and close neatly like FXBTC, more coins will be taken out, therefore more coins will hit the western exchanges, and the price will drop more.

On the other hand, more GOX-style failures may lower the public confidence in Bitcoin and thus lower its price too.  Who knows.

The "google investigation" on Mr. Brewster's background seems to indicate that Neo & Bee was not merely a well-meaning project that failed due to inadequate planning and lack of financial competence. 

I saw two walls a few CNY apart, each ~1400 BTC.  I believe they were eaten in one gulp each.

Huobi should reorganize as a ballet theater and charge admission fees to let people watch their order book.

Yes, I am aware of that.

Also I believe that the N&B shares were not equity (a piece of the company, possibly worth something if it is liquidated) but profit-only "shares" (thus worth zero if the company is liquidated), correct? Or I am mixing up with some other failed business?

If that is correct, I suppose that any assets remaining from the liquidation, after paying the real creditors, will go to the company owner -- namely, Mr. Brewster. 

Hm... when people started wondering whether MtGOX was solvent, Roger Ver (a good friend of Mark Karpelès)  posted a video on YouTube where he claimed to have seen MtGOX's bank statements and guaranteed that it was solvent.

If I did that I would have less time left to post on the space forum. 

Interesting! No, I never heard of that game.  My kids used to play Nintendos a lot but I never got interested in commercial video games.  In 1979 or 1980 I got to play some early versions of Asteroids and Space Invaders on this machine, the first widely used  (but not yet commercial) computer with a GUI and mouse.   At the Xerox and DEC labs where I worked people wrote a few games of their own, and their own version of Tetris. 

Chinese Slumber Method prediction for Tuesday May 06

Prediction valid for: Tuesday 2014-05-06, 19:00--19:59 UTC (not before, not after)
Huobi's predicted price: 2635 CNY
Bitstamp's predicted price: 427 USD





[ Plot legend ]

The data point for today May/05 was fairly good (S = 0.0041, W = 0.716).  It was below but fairly close to the previously assumed trend, so it seems most reasonable to stick with it.   Fitting again a straight line to the last four data points, by weighted least squares, gives A + B*(d-d0), where (d-d0) is the number of days since May/02, A = 2746.70, B = -27.96.

The Bitstamp prediction, as usual, is the Huobi prediction divided by the currency conversion factor R, taken to be 6.17 CNY/USD.  Its value was 6.18 today (May/05), 6.16 yesterday, and 6.17, 6.08, 6.11, 6.22, 6.25, 6.05 on the previous good sample times.
 
Checking the previous prediction

Prediction was posted on: SaturdaySunday 2014-05-04, 23:26 UTC
Prediction was valid for: Sunday Monday 2014-05-05, 19:00--19:59 UTC (~20 hours later)

The Method was just a tad too bullish:

Huobi's predicted price: 2676 CNY
Huobi's actual price (L+H)/2: 2656 CNY
Error: 20 CNY (~3.24 USD)

Bitstamp's predicted price: 434 USD
Bitstamp's actual price (L+H)/2: 430 USD
Error: 3 USD
 
NOTE: "The only difference between me and a madman is that I am not mad." --Salvador Dalí

EDIT: May/04 was Sunday, May/05 is Monday.

In the late 1980s and early 1990s I spent as much time discussing space exploration on the USENET sci.space forum as I am spending here.   Here is one of my posts from that time.  By the way, "mining" then meant extracting precious elements from asteroids to build spaceships or space colonies.

But no one ever told me that I had to put at least one satellite into orbit, or capture at least a small asteroid of my own, for my ramblings to be worthy of that forum. 

PS. In 1986 the internet was restricted to universities and some computer companies, such as DEC where I pretended to work worked, and was managed by (D)ARPA.   There was no WWW; only FTP, e-mail, and USENET (a distributed bulletin board with its own protocol, UUCP).  There were no anonymous users; if anyone misbehaved badly, other people would complain to his employer/university, and that usually solved the problem.   Can you imagine an internet with no spam, no advertising, no phishing, no viruses, no webpages that steal your cycles to mine bitcoins, no silly avatars? In 1986 the first computer worm was still 3 years away.   Sigh... 

Strange Monday at Huobi: a bit of trade in the morning and early afternoon, very little from 5:00 pm local time onwards.  Usually it is the other way around, trade peaks in the late afternoon and evenings.

What happens now to Neo & Bee, legally?  I understand that, in some jurisdictions, the creditors can start the legal liquidation of the company and the distribution of its assets, even if the CEO is in Shangri-La and the employees have all quit their jobs.  Is that happening in Cyprus?

Is there any evidence that the banks or "Wal Street" (whatever that means) are buying bitcoins for themselves?  Any public news?

SecondMarket's BIT and Pantera's PBP do not buy for themselves; they only skim fees from common investors who buy bitcoins through them.  It is these investors who bear all the risk.

Fortress had invested in Bitcoin, but it only gave them a red stain in their quarterly report.  I read that they gave their bitcoins to Pantera in exchange for equity in their fund management company -- which, like SMBIT and PBP, will make money for the managers no matter what happens to the bitcoin price.

Bitpay stated that they do not keep any bitcoins themselves.  So, who are those "Wall Street' investors?

It is quite likely that banks and/or credit card companies will eventually adopt the offline key/address generation method and crypto-signed "digital checks", which is the only part of the crytocurrency concept that is obviously a win.  However, a bank-managed crytpocurrency will not need any of the other parts of the Bitcoin protocol, such as mining and distributed confirmation by voting; and therefore would be much faster and more resource-efficient (hence cheaper to operate, hence could drive Bitcoin out of the "market" just by making more profit with lower fees).

Indeed, by negating some of Bitcoin's "features" (such as irreversibility, anonymity, and immunity to confiscation) such a BankCoin will be better than Bitcoin from the consumer and/or law enforcement viewpoints.  Once such a law- and consumer-friendly BankCoin is available, governments will surely outlaw the "Bitcoin International Bank" (the miner network) for not complying with AML, KYC, etc. 

I would hate this outcome, but I can't see why it could not happen.