Here is one clue as to what is going on:
To what does he [Zennon Kapron] attribute bitcoin’s popularity in China, and how could others benefit from it?
“There’s BTC China’s no-fee trading for starters. You can leave your money on the platform, your coins on the platform, and trade in and out for free,”
The entry and exit points aren’t free, with a 0.5%
(China’s PayPal equivalent) cash in/out fee, and a 1% bank transfer fee.
Capital controls in China are strict. It’s easy to bring money into the country, but getting it out (to invest or spend) is more difficult. That means there are are plenty of wealthy Chinese citizens and residents looking to move their money around the world with greater freedom.
There is more .
And here is , recommended.
In other words, more entrepreneurs in China are holding Bitcoin and accepting the volatility of its value, in order to sell the asset to those looking to get money out of China.
Those using Bitcoin may wish to diversify their portfolios, they may need to make payments abroad, or they may think the Chinese currency is currently overvalued, or some mix of the above.
Bitcoin has become increasingly popular in China, and , yet the currency has hardly any retail use in the country.
Still, the number of yuan-based Bitcoin trades has risen thirty-fold in the last two months, .
Right now, you can think of the value of Bitcoin being set in the same way that the value of an export license might be set through bids.
If/when China fully liberalizes capital flows, the value of Bitcoin likely will fall.
To the extent the shadow market value of the yuan rises, and approaches the level of the current quasi-peg, the value of Bitcoin will fall, by how much is not clear.
Or maybe getting money out through Hong Kong (or Shanghai) will become easier and again the value of Bitcoin would fall.
If , the main broker, which by the way accounts for about 1/3 of all Bitcoin transactions in the world, the value of Bitcoin very likely will fall.
You will recall that
admittedly stopping Bitcoin could prove harder but still they could thwart or limit it.
If you are long Bitcoin for any appreciable amount of time, it seems you are betting that the Chinese economy will do poorly and capital controls will remain.
Then more people will be increasingly desperate to get more money out of the country.
Or you may be betting that the Chinese use of Bitcoin to launder money will increase due to the mere spread of the idea, through social contagion.
According to , the value of Bitcoin is up by a factor of 66 this year in China.
To the extent the price of Bitcoin incorporates expectations about the future strength of the social contagion effect in China, the price of Bitcoin may become more volatile.
Expectations about the future strength of social contagion effects are probably not so stable.
In theory these points might give you a way to hedge the value of Bitcoin.
Or hedge the value of China.
about how Bitcoin prices in yuan do not so closely mirror Bitcoin prices in dollars.
If you are a resident of China and have a BTC account there are numerous interesting possibilities, none of which I recommend for the faint-hearted.
(Justin Wolfers doesn’t have to like this, but how can he think it is not interesting?)
I do not recommend that you go either long or short in Bitcoin, unless it is a small amount of money and done “for kicks.”
By the way, Ben Bernanke, by “talking up” the price of Bitcoin, is placing an implicit tax on the Chinese Johnny-come-latelys to this market, whether he intends it or not.
He also is raising the price for circumventing Chinese capital controls and perhaps thus delaying a fall in the actual market value of the yuan.
For related ideas behind this post, I am indebted to .
Addendum: Izabella comments .
Our Web Pages
Contact Us
Interesting People and Sites
Recent Posts
Supporters
Categories
Select Category
Books&&(2,061)
Current Affairs&&(2,535)
Data Source&&(1,177)
Economics&&(7,921)
Education&&(1,596)
Film&&(403)
Food and Drink&&(816)
Games&&(203)
History&&(1,475)
Law&&(1,534)
Medicine&&(1,014)
Music&&(388)
Philosophy&&(598)
Political Science&&(1,597)
Religion&&(334)
Science&&(1,330)
Sports&&(351)
Television&&(191)
The Arts&&(444)
Travel&&(190)
Travels&&(238)
Uncategorized&&(2,922)
Web/Tech&&(1,744)
Weblogs&&(101)
Select Month
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
September 2005
August 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004
September 2004
August 2004
April 2004
March 2004
February 2004
January 2004
December 2003
November 2003
October 2003
September 2003
August 2003John Titor - Time Traveler58cv网址导航58cv网址导航