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Did Chinese Rumors Crash the Bitcoin Price? How Accurate Are They?

Source: bitcoin

Bitcoin Chinese Money

Bitcoin’s recent bull run ended with a thud on 3rd November, reaching above $740 before crashing to around $685 in just a few hours. Was a rumor of further Chinese restrictions on Bitcoin exchanges to blame? And if so, how accurate is the news?

Also read: AirBitz and WINGS Partnership Secures Future of DAOs

Chinese Rumors Start to Spread… Again

Dramatic financial news site ZeroHedge reported on 3rd November that Chinese regulators “are considering policies including restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation and imposing quotas on the amount of bitcoins that can be sent abroad.”

While speculators have often wondered about Bitcoin’s effect on capital flight from China, others doubt it has any impact at all. BTC price movements in the past have appeared to correlate with Chinese monetary policy announcements.

ZeroHedge cited “Bloomberg sources” as the story’s origin, though provided no link. On Reddit, readers were skeptical given recent positive signs such as last weekend’s First World Blockchain Conference in Changsha. Several high-level political officials attended the conference, which was organized in part by China’s Ministry of Industry and Information Technology (MIIT).

By press time, the BTC price had rebounded substantially back to $702, though not back to its previous highs.

Has Anyone Else Heard the News?

Chinese Bitcoin news and information portal BitKan said the Bloomberg news was a hot topic in its office this morning. However although other media outlets were repeating the story, no-one has been able to find where the original report came from.

Local Chinese news reported the information as such (translated):

“According to Bloomberg News, PBOC and other Supervision department are analyzing and planning to launch measures, to restrain exchanging CNY to USD via Bitcoin transactions. Measures which are in consideration may include restraining Chinese exchange platforms transferring Bitcoin to overseas exchange platforms, or setting limits on amounts of bitcoin removed to overseas exchange platforms.”

BitKan reported no-one in the Chinese Bitcoin industry had heard any information from the government directly. However, since Chinese policy rumors first started to impact Bitcoin in 2013, the government has rarely communicated with companies directly.

However founder Edward Liu suggested the news may not be bad, even if true. Speaking to Bitcoinist, he said:

“if the news is true, it shows that the Bitcoin industry has got growth in China. Also, being regulated is a necessary stage for every growth industry. If the Chinese goverment lauches any regulation about the Bitcoin industry, BitKan will make efforts in cooperation.”

Other China-based industry representatives also said they hadn’t heard any such news.

Virgilio Lizardo Jr. of Bitcoin multi-services firm Bitbank, which is involved in both exchange and large-scale mining operations, said: “Total nonsense, China is taking a more positive approach to Bitcoin and blockchain technology. The conference is proof positive of that.”

China’s Bitcoin ambassador Willson Lee, who just assisted in organizing the recent blockchain-themed conference for high-level Chinese party officials, said he’d not heard anything about a policy change.

Let’s Wait and See

So was the original report real? Or are outlets simply re-reporting a rumor, with the inevitable price movements?

At press time, the industry is still waiting for confirmation from sources other than Bloomberg. While the news does not appear anywhere on Bloomberg’s news site, the service provides an instant news feed to terminal subscribers which often does not appear elsewhere.

Bitcoinist will keep an eye on this developing story and report updates as they become available.

Did you make or lose any money on the previous 12 hours’ volatility? How much influence do Chinese traders have on current bitcoin value? Let’s hear your thoughts.


Images via Shutterstock

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Did Chinese Rumors Crash the Bitcoin Price? How Accurate Are They?

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Pro 29

Ukraine Economy Bailout Presents Bitcoin Opportunity

Source: bitcoin

Ukraine Economy Bailout Presents Bitcoin Opportunity

For some countries around the world, times are very tough as local economies are starting to fall apart. Ukraine is one of those countries, as inflation will be hitting a record-high of 44 percent later this year. Combine that number with a near 25-percent inflation, and anyone can see why the Ukraine economy needs a bailout. At the same time, Ukraine’s central bank is warning people about the use of Bitcoin and other digital currencies.

Also read: Pirate Bay Co-Founder Attacks Music Industry With New Gadget

Ukraine Economy Collapses After Conflict With Russia

There are several factors to blame for the collapse of Ukraine’s economy, although the biggest culprit comes in the form of a conflict with Russia. On top of that, the Ukraine economy is plagued by capital controls, making it all but impossible to move funds in and out of the country altogether.

With inflation hitting a whopping 44 percent, the situation in Ukraine is more than dire right now. Prices for goods and services have been soaring due to the Hryvnia losing a fair share of its original value, and consumers are faced with less purchasing power. Considering Ukraine was already subject to nearly 25% inflation back in 2014, things have not improved at all over the past twelve months.

But it looks like help is on the way, as capital controls will be lifted gradually in the coming months. Thanks to bail-out cash from international lenders, the Ukraine economy will survive, and hopefully be able to reduce its inflation rate to 5 percent by the end of 2019. In total, US$9bn in rescue cash will be coming to the Ukraine economy in the near future.

As one would come to expect, that money has to come from somewhere. The International Monetary Fund (US$4.5bn), the European Union (US$1.5bn) and a loan guarantee from the US (US$1bn) are pooling together the necessary funds to give Ukraine’s economy  a chance to recover in the next few years.

Time For Plan Bitcoin?

Similar to most central banks all over the world, Ukraine’s central bank is not too keen on Bitcoin and other digital currencies. Just a few months ago, a warning was issued regarding the dangers of Bitcoin, and consumers were advised to steer away from this type of currency as it is not controlled or guaranteed by the central bank.

At the same time, residents of the country have been struggling to make ends meet for quite some time now. With tight capital controls in place, there are very little options at the disposal of Ukrainians who want to safeguard some of their wealth from further economical demise. Bitcoin provides them with that option, despite warnings by the central bank. Plus, a new Bitcoin exchange will be launching in the country very soon.

What are your thoughts on the economic situation in Ukraine? Will Bitcoin provide a solution to the turmoil? Let us know in the comments below!

Source: Telegraph UK

Images courtesy of Shutterstock, Russia-Insider, Your News Wire

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Ukraine Economy Bailout Presents Bitcoin Opportunity

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