I posted once a simplified example of how arbitrage can work smoothly between the Chinese and Western markets without ever exchanging CNY x USD.  One needs  accounts on both exchanges (which any businessman with a foot on each country could get), or a society of two who agree to share the profits.

And it is a fact that all the markets are well-connected so that the prices are closely matched, except briefly when the price is swinging too fast, and with adjustment factors presumably due to fees or other reasons  I beieve that it is arbitrage, in fact, that eliminated the "free fall" crashes that used to be common months ago, and has turned them into slower "viscous" falls.

The unity of all the markets became notable when MtGOX severed both the money and the bitcoin channels with the rest of the world.  That is the sort of divergence we should see if China and the West were really disconnected.

But many of the BTC startups (like investment funds) depend on bitcoin succeeding as currency, while by themselves they will not help that goal, and may even hinder it.  They of course are putting lots of money into marketing bitcoin to the unwary.

Right, the market still does not give much probability to the million-dollar bitcoin, or even to the 5000$-within-a-year bitcoin.   Are the traders all paid trolls?  Were they all scared because of what I have been posting here? 

Thank you. Yes, that's me.


Sig, someone does needs that lesson here.  Which one, now?

I don't recall seeing an answer to my point about altcoins vs scarcity.  Or to how important is the Chinese market for the price of Bitcoin.  Or to why is the price 500 USD if it is very likely to be 1,000,000 USD "soon".  Or...

Believe what you will. I cannot (and I don't want to) change people's religious beliefs.

(Those who doubt that the Earth is flat must be paid by the makers of round globes, of course...)

If I were a paid troll, I would deny it, no? Silly question...

Tell me where I have "spread fear" without backing it up with argument.

Meanwhile I can tell you right away one of the lies that marketeers keep spreading: that "bitcoins will be extremely valuable because there can be only 21 million of them".  The truth is that there can be an infinte number of cryptocoins, any brand of them is just as good for commerce as any other, and there is no reason to believe that bitcoin will be among the ones that will succeed if they do succeed.

Of course the answer is not.  Are you a paid salesman?

Rather: the reason price is still up is because those who hold thousands of coins need other people to invest so that the price will go up. So they pay for ads and positive reviews, to keep spreading lies and hiding the uncomfortable facts.   

Humpf.  Goatish, at most.

Then why did the price drop on Thrsday?  For fear that the price may go up on monday? 

Of course I am "paid by some government agency": I am a teacher of computer science at a public university, and occasional public advocate on computer-related issues.

I already explained enough my position.  I am a troll just because I don't swallow all the bitcoiners hype and tripe? Because I am not willing to ignore all the scams that are growing on it?

Come on, "ban" is a shorthand for "ban on the use of bank accounts to move money into or out of the exchanges".

Deposits are NOT already halted, that is part of the rumor.  If the rumor is false, everything will continue as it is now, with withdrawals AND deposits through the exchange's bank accounts.

Between Dec/20 and Jan/01 the Chinese exchanges became convinced that they could still operate legally as they do today: namely, that clients could still get money in or out as long as it was in yuan, via the exchange's corporate bank accounts.  It is clear that they did not expect that channel to be closed, and almost certainly it has been the main deposit and withdawal channel since then.

Yes, no one shoudl have been expecting an increase in client base in China after the December decrees, because they closed most of the potential uses of bitcoin in commerce and in the finance industry.  However trading still went on, basically for investment or speculation, with far more volume than in the West.

I am quite convinced that the Chinese exchanges were responsible for the price rise from ~100$ to ~1100$ on October-November, for the recovery in late december, and for its support at the current level.  Does anyone doubt that they were responsible for the crash in early December, and for that of last Thursday?

In my understanding, the price has been declining since january because Chinese investors and speculators have been gradually taking their money out of the bitcoin market.

If this "PBoC ban" rumor is true, most of those clients will probably sell their BTC at a low price and take the money out before April 15.  They could move their BTC to their wallets or to foreign exchanges, but what would they do with them?

I can't imagine what would happen after April 15 if the ban is true.  Perhaps, before that date, all the coins in the Chinese markets will be bought by arbitragers to sell on the Western exchanges, or by the subset of the investors who can take money out after April 15 by other means, such as cash or vouchers. (I don't know how those vouchers work, but doubt whether one can move a million Yuan with them.)  Trading may continue after that deadline, but surely not as vigorous as today.  there will be fewer traders, fewer investors, and diminished hopes of short or medium-term gains.

Thus, if the ban report is true,  it can only lead to a substantial and persistent drop in BTC price between Monday and April 15.

If the rumor is false, I expect that the price will go back up to the pre-rumor level (around 3500--3700 CNY or  580--610 USD), and then resume the slow descent from there.

However there may be a permanent residual price drop, due to people becming aware that such a ban is possible in the future even if not right away.

Of course, in 48 hours we will probably know whether the "PBoC ban" rumour is true or not.  Either way, we can expect a large change in price.

If the bankruptcy court sees those coins as valuable property, they will not allow their distribution.  Creditors must  enter the queue; AFAIK employees have priority, then "secured" creditors (banks or anyone who loaned money with specific assets reserved as guarantee), then all other creditors (which includes the clients).  The court may decide that those coins must be sold to pay the first creditors in line, for example.

There is also the problem of defining how much debt MtGOX has toward each client.  The balance in each client's account at closing time could be one choice, but then the court will have to trust MtGOX's internal accounting (what if Mark claims that client "Tibanne The Cat" had 700,000 BTC in his account?).  Another choice could be how much each client deposited minus how much he withdrew, ignoring all trades made; it would be easier to verify, and more just in many ways, but the most successful traders would be extremely unhappy, of course.

Whichever way it goes, it may be an important legal precedent, even if it will not be binding outside Japan.

They don't know yet if the ban is real. If it is a hoax, the mainland accounts will continue working with banks as they do now, which is what is said there.  If the ban is real, the bank accounts will be open until April 15 for withdrawals only, then the Mainland accounts will be useless.  The international accounts hopefully will not be affected because they can be charged only through international vouchers which are distinct from the Mainland vouchers.

I read it as a preparation for the worst: closure of their trading business in china.  They would become an exchange sited in China but catering only to foreign clients.

They already had plans to expand their market overseas.  This may be part of it, precipitated by the PBoC rumor.

Is it? BTC deposits do not need vouchers, I understand they are for yuan/usd/whatever. ("BTCC" is "BTC-China", not "Bitcoin".)

Those options, except the vouchers, presumably will be closed if the ban is real.

There may be some problem that prevents using the same vouchers for both accounts.  Perhaps they fear that the mainland vouchers will be banned too in Mainland, and the international vouchers will be sold only outside the Mainland?