Capital Controls Blowback? Bitcoin Surges Back To Pre-China-Currency Wars Levels
At $267, Bitcoin has retraced the entire plunge from China's initial devaluation entry into the currency wars and the Black Monday dump. It appears, just as we warned, that China's increasing crackdown on its - until now lax - capital controls has spurred demand for alternate 'currencies' that remain out of the control (for now) of governments - like gold...
And Bitcoin...
As we concluded previously, while China is doing everything in its power to not give the impression that it is panicking, the truth is that it is one viral capital outflow report away from an outright scramble to enforce the most draconian capital controls in its history, which - as every Cypriot and Greek knows by now - is a self-defeating exercise and assures an ever accelerating decline in the currency, which authorities are trying to both keep stable while also devaluing at a pace of their choosing. Said pace never quite works out.
So what happens then: well, China's propensity for gold is well-known. We would not be surprised to see a surge of gold imports into China, only instead of going to the traditional Commodity Financing Deals we have written extensively about before, where gold is merely a commodity used to fund domestic carry trades, it ends up in domestic households. However, while gold has historically been the best store of value in history and has outlasted every currency known to man, it is problematic when it comes to transferring funds in and out of a nation - it tends to show up quite distinctly on X-rays.
Which is why we would not be surprised to see another push higher in the value of bitcoin: it was earlier this summer when the digital currency, which can bypass capital controls and national borders with the click of a button, surged on Grexit concerns and fears a Drachma return would crush the savings of an entire nation. Since then, BTC has dropped (in no small part as a result of the previously documented "forking" with Bitcoin XT), however if a few hundred million Chinese decide that the time has come to use bitcoin as the capital controls bypassing currency of choice, and decide to invest even a tiny fraction of the $22 trillion in Chinese deposits...
... in bitcoin (whose total market cap at last check was just over $3 billion), sit back and watch as we witness the second coming of the bitcoin bubble, one which could make the previous all time highs in the digital currency, seems like a low print.
We bring all this up in case there is any confusion why Bloomberg just carried a huge centerfold piece explaining why CDS-inventor Blythe Masters has suddenly become the digital currency's most vocal pitchman and is betting it all on bitcoin, in "Blythe Masters Tells Banks the Blockchain Changes Everything."
Yes, bitcoin may be slowly but surely leaving the domain of the libertarian fringe, but in exchange it is about to be embraced as the most lucrative and commercial "blockchained" way to capitalize on what may soon become the largest capital outflow in history, with "pioneers" such as Blythe front and center to capitalize on each and every outflowing Bityuan.
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Moar eye bleach please.
At least she has an Adam's apple.
Cue Fonestar or whatever handle he is now.
I'll be stacking silver... but bittycoons are starting to get interesting...
OH MY FAWKING GAWD ITS BITCOIN!!!!!!!
$267?
Still a ways to go to recapture $1,200 from last December...
[PS: Blythe has 'Man Hands']
$0 to $250 in < 6 years.
Unit-for-Unit the most powerful currency (by far) on Earth.
Now please try and tell me those are not FACTS!
The $1,200 price was an anomaly arising from Mt. Gox fraud and manipulation. At the time. Mt. Gox was handling 70% of bitcoin/fiat exchanges and had custodial control over a large percentage of bitcoins in use. Nuts for people to hand this power over to Mt. Gox, but at the time most people were still stuck in centralized/trusted bank ways of thinking and behaving.
http://www.coindesk.com/research-bitcoin-price-higher-repressed-countries/
Turns out Bitcoin is popular wherever financial repression occurs.
"Bitcoin, he says, is a low-cost option which allows citizens of these nations to bypass their domestic financial system."
PS. The paper was written by a liberty loving ZH fanatic.
PPS. Masters doesn't support digital gold (Bitcoin). She wants to make her own digitial currency that is inflatible. Masters is Bitcoins enemy. Masters and her ilk love "blockchain" but not Bitcoin.
Bitcoin is digital gold. What do YOU think Masters stance towards a digital scarce commodity is???
IT SAYS IT RIGHT ON THE FRIGGEN COVER!!!
Cue Fonestar or whatever handle he is now.
fonestar is with you, and also with you!
A succubus?
Blythe is more than welcome to take on the world's most powerful currency. It is teh biggest mistake she will make....
Btc is like gld, you can run, but you can't hide.
Bitcoin is the peak of human stupidity.
go fuck yourself loser, Bitcoin is teh pinnacle of technology!!
BITCHCOIN
guess it would take a bitch to know one?
Blockchain - a specially kinky type of bondage?
Yes, bonding bankers and borrowers to an open ledger.
balls deep baby!
IIRC, 80+ % of BTC transactions are in Yuan. The Chinese are very familliar with it. Also, I think Blythe, and many others in the space, are looking into disrupting traditional financial services using Blockchain ledger tech, rather than Bitcoin currency itself. It's been a nice run the last couple of weeks. Could it be a sign of Yuan devals to come?
You can't seperate blockchain and bitcoin. If Blythe wants to do it, she demonstrates that she does not unterstand it.
Amen. Like announcing she will be producing square circles, she reveals she doesn't understand what blockchain is nor bitcoin is. Anyone who seriously studies the technology for more than a few days figures out the two are fundamentally inseparable.
But she's of the same institutional banker crowd that is convinced inflation is good, printing money will help the economy, and incentives don't matter. So perhaps that explains everything. Fortunately, in this case it is only her business and career that will implode, not the entire economy.
disrupting traditional financial services using Blockchain ledger tech
Pure idiocy. Blockchain is obscenely inefficient at transaction processing and maintaining a ledger compared to traditional client/server architecture. The only reason for using Blockchain is it confers the unique ability to operate trustlessly, without any centralized authority.
If Blythe is going to need this because she will be stepping outside the law, big banks will not do business with her. If she stays within the law, she'll be using technology many orders of magnitude more inefficient than an ordinary client/server model. The concept is inherently a non-starter, a total fail since the moment of conception.
Tax havens are so 20th century.
Welcome Bitcoin. It doesn't generate interest capitalization, so you only have to declare in taxes when you sell them, it is harder capped than gold (21 million bitcoins maximum), unconfiscatable, easy to transport everywhere. Basically, the tax havens of tax havens.
DING! DING! DING!
You are one out of the many, Satoshi honour goes to you. Bitcoin is teh uLT1mate tax haven!
So many ZHer’s have a hard on for bit coin. They can be as Neanderthal as they can be intelligent at times. If it ain’t bullion they disdain it. I got news for ya. When capital controls really kick in and there’s no bullion to be had, people aren’t going to buy accordions, pianos, and farm implements like they did in Weimar Germany. Only bitcoin gets you out relatively cleanly. Its gonna go to the moon too. Why not have a little and enjoy the ride?
Well, Good Luck with that after the CFTC, the SEC and the IRS control all the Exchanges:
https://bitcoinmagazine.com/articles/digital-currency-derivatives-exchanges-prepare-for-regulation-after-cftc-bitcoin-ruling-1443197199
SELL ALL RALLIES
Gold is the money of kings; silver is the money of gentlemen; bitcoin is the money of technofiles; barter is the money of peasants; but debt is the money of slaves.
Barter? When was barter ever a thing?
For all the barter deniers out there...
I don't know when it existed and I don't care, the concept is good to explain money. We know we have money now, that they must have developed at some point, and that human trade have existed as long as humans have, or at least before money developed. Therefore we can say that barter has existed.
Just be aware that in a market, for instance a prehistoric, undocumented market, just consisting of a place for a few people to meet, as soon as some commodity or good was preferred due to its higher liquidity, that commodity becomes the money and it is no longer a barter market.
Bitcoin is scarce.
Is gold even scarce? (Please not the Cabal controlled data on gold quantities)
Still in this "running correction" but trying to develop a confirmed change to LT trend. Next bull it goes to at least 2.5x current ATH.
That jamie dimon in drag, cant quite make out the potus ear-rings though
The Chinese giving up on their history of gold and sending their money to the CIA via BTC instead, ...genius.
David Hannum was right, just like PT Barnum.
Small change
Fart in a windstorm
"China gots the gold"
So at $264.20 time stamp, it has been no lower than about $220 in a long time. Pretty stable for the most part $220.00-$265.00 since it tanked the first time. It seems to level out in that area.
$265.00 is not a lot of money in $.
But what if it did reach above $1K, and you didn't balk at BTC and choose to have 'just one'?
Just one is the same as the needless expenditure you don't mind throwing out $265.00 for month after month.
And you can buy as little of a piece of BTC like a 1/4 BTC, just to have.
My understanding is that 220$ish is the cost in electricity to produce 1BTC. Reward halves sometime next year.
The point about gold being difficult to transport was true until recently. Now there is BitGold as well, for transactions in gold across borders. And Uplift, for free convertibility and international transactions in fiat.
The uptake of bitcoin will boost its price, that's for sure. It remains to be seen if a currency crisis in the Yuan is going to be the thing that makes it happen.
BitGold is the stupidest idea possible: take gold which is inherently not suited for digital trade and make it digitally tradable by strapping whole lot of counterparty risk on it. Thanks, but no.
Bitcoin is free market, private money. I repeat, it is money. Base money, not debt. It has interesting capabilities better than gold, gold has some traits that bitcoin does not have.
Bitcoin is bitcoin, the blockchain is a part of it, and bitcoin is a part of blockchain. They are inseparable. It is not a payment system, it is the actual money.
Regulation by the state - so be it. Basically, we don't care.