Bitcoin Spikes Above $600 - 2 Year Highs - On Sudden Massive Chinese Buying

Tyler Durden's picture

Once again, on a Saturday night (US time), Sunday morning (China) a sudden burst of buying pressure in Bitcoin, driven by Chinese buyers, has spiked the virtual currency higher on dramatic volume. With Bitcoin now trading at its highest level since May 2014 (in Yuan), and up 250% since we first suggested this an outlet for desperate-to-leave capital outflows in September, we note that the 'arbitrage' of over 150 Yuan points to massively more demand from Chinese buyers for now.

Another weekend buying-splosion in Bitcoin by The Chinese...

 

It appears, just as we initailly warned here, that more than a few of the few hundred million Chinese have decided that the time has come to use bitcoin as the capital controls bypassing currency of choice, and decided 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.

And once again tonight, that panic selling of Yuan for Bitcoin has sent it surging in the last few hours, now above $600...

 

This pushes Bitcoin to 2 year highs priced in USDollars...

 

And once again it appears the dominant buyer is in China (OKCoin exchange - which reportedly has 90% of global Bitcoin traffic). This is the highest 'China' Bitcoin price since May 2014

 

Notably with Bitcoin trading 4187CNY and 615USD (with USDCNY at 6.5624), China Bitcoin is trading around 150 Yuan rich to Dollar Bitcoin (once again suggesting strong demand from Chinese buyers).

Both Gold and Bitcoin have been rising since we first warned of the surge in Chinese capital outflows but the virtual currency has dramatically outperformed...

 

Charts: BitcoinWisdom

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wee-weed up's picture

Yeah, they did the same with their stock market... every little rickshaw boy was buying stocks... remember what happened there?

knukles's picture

Honest quesiton, talking about China.
Why is "Oriental" a incorrect term and "Asian" is OK?

nmewn's picture

Because the intellectuals tell us so, thats why!!!

38BWD22's picture

 

 

 

nmewn ol buddy ol pal:

 

Offer is still open re free BTC for you.  If you open an account, I'll send you enough to experiment with.  gmail me at my old name ("DCRB").

nmewn's picture

Well I appreciate the offer Do Chen but I'm taking my scalps through the 401k.

 

 

Its just digital "money" too ;-)

thesonandheir's picture

Paper gold would be up there too if it wasn't so badly manipulated. 

mmanvil74's picture

The irony here lies in the reason China will not ban Bitcoin.

First, they can't (technically), but they won't try because the Chinese already have a leading edge on the Bitcoin arms race, in terms of trading volume and miner hashing power. To ban it will only drive their smartest people and business interests elsewhere, and every government knows by now that some of the world's smartest people are working on and investing in bitcoin and related technology. China knows its nation is stronger if its people own gold, and now China knows that its nation is stronger if its people know and understand cryptocurrency.

Even Russia is starting to realize that to ban it is to put their own cryptographers at a disadvantage relative to other nations. And the Americans? Well, Joe American will probably be the last one on board, but Silicon Valley knows for a fact they are about to pull the rug out from under Wall Street, so let the games begin. Either way, crypto wins.

As another poster asked, are we in the infancy of a global stampede into cryptocurrency? Yes, we are.

RadioFlyer's picture
RadioFlyer (not verified) mmanvil74 Jun 12, 2016 6:13 AM

Too bad cryptocurrencies have two counterparties: electricity and 'faith and trust'

Those paper wallets are only good up to a point.

U4 eee aaa's picture

Doesn't make them much different than the fiat currencies then. The difference being there isn't a corrupt banker sitting at a bitcoin printing press waiting to kill it at a word

mmanvil74's picture

Everything is only good up to a certain point. What's your point? If you are worried about the loss of electricity and/or the loss of the internet, I feel sorry for you. Why live in terminal fear??

Escrava Isaura's picture

I used to wonder, because the answer became obvious, what will happen to Bitcoin when the electric grid no longer functions properly, and in some nations won’t be functioning at all.

 

Save in gold, your idiot. Gold will be the last bubble before collapse.

 

By the way, I am talking to whoever thinks saving in Bitcoin is wise. It’s not wise because Bitcoin is too complex. During collapse you’ll need less complexity. Physical gold will be your best investment, period.

 

 

38BWD22's picture

 

 

 

Escravita

 

You should know by now that I only recommend a MAX of 1% of net assets into BTC.  You can see more of my comments further below (especially note that I address the "Grid Down" scenario).

 

Vs. +/- 10% in gold for those so inclined.  

 

Diversification used to be ol' DCRB's middle name...

Escrava Isaura's picture

My take: 50% on the market. 20% in currency. And 30% in gold.

 

And god have mercy when this whole thing implodes. It will take forever to implode. But when it does, the whole world will turn into a banana republic in matter or weeks.

 

If we don’t nuke each other. Then, c'est la vie and au revoir. It was a pleasure talk to you all.

 

38BWD22's picture

 

 

 

Hear you there, E.I.

 

 

 

EDIT:

 

I wonder if anything serious is happening in China?  This is a big jump in BTC price (around 9%, and my understanding is that it happened very fast).  Shanghai stock trading opens at +/- 9:00 PM (US ET), so if anything is bad in China, I suppose we will know by then.

SoilMyselfRotten's picture

And if so it should also be reflected in tonights gold open, we'll see soon enuff

fattail's picture

How much beer can you buy with BitCoin in venezuela when the power is off?  

CPL's picture

Got a printer?

 

http://www.coindesk.com/information/paper-wallet-tutorial/

 

You can print your own currency...as long as you actually HAVE currency.  Can't print it out of thin air.  People have tried...and fallen out windows or tripped on nailguns.

deimosaffair's picture

exactly the same amount you can buy with Marstercard   ;)

Jay's picture

A more likely eventuality is that you need to get from one area or country where things are really bad to a better area or country where things are much better. Now how do you get your savings there when there are a dozen checkpoints between the bad place and the better place?

Golden Phoenix's picture

Bitcoin isn't necessarily about the collapse of a civilization. As is the case with the yuan it can simply be about the collapse of a currency. It's possible to buy things around the world with bitcoin now, something it'd be difficult to use a small gold coin in your pocket for.

 

If society collapses totally and you think you're going to be ok because your pockets are bulging with gold you'll be shocked to discover you merely collected it for an armed gang to take it from you. Bluster about your superior balls and brains all you want but if society really does completely collapse someone will come along and pop them for you. If you want to accumulate something for the end of the world which will be both a store of value and utilitarian choose ammunition. Without that nothing else would matter.

Advoc8tr's picture

Its rise can also simply be caused by growing acceptance and usage. It has a fixed (low) inflationary rate until it eventually becomes a 'fixed' supply.  This means that the more people that use it the higher the price will go until it reaches some kind of steady saturation rate.  If you assume it will ultimately absorb just 10% of global currency / cash liquidity it will be many of thousands of dollars per unit (no math just a guestimation) ... as would be the same case if gold were monetized.

nomofiat's picture

$100k by the end of 2018

CPL's picture

I like the end of the bitcoin story once all 21 million coins are mined.  Big fan of happily ever after and nerds saving the world is awesome.

 

https://en.wikipedia.org/wiki/Tui_bei_tu

 

There's a story about Coyote bringing peace to the tribes of the PacNW. 

Coyote and White Wolf made a puzzle and broke all the pieces of the puzzle up and gave them to the people of the First Nations.  And in order for the people of the first nations to put together the puzzle they partied, because that's how 'war' happened, they'd out do each other in a party.  Today we call it a potlatch but in Pac Northwest history it's how they used to 'battle'.  Who could throw the best party and at the end of the 13 months in a lunar cycle that defined the years on earth.  The one with the most pieces of the puzzle was declared 'the winner'. 

 

The 'winners' honour was to throw a big party for everyone and honour the big picture of all the pieces gathered together in one place so they could see the big picture that the puzzle made.  There at the potlatch they with the house totems would sing the song of all the tribes and perform the seven dances given by Buffalo woman to turn back the clock to a time of peace.

 

21 million piece jig saw puzzle and to solve it, the more people work together, the faster the puzzle gets solved.  Hence the partying.  So are you all SAPIENT, or animals?  Animals gets slaughtered for meat, sapient gets treated as equals.

ZorroHedge's picture

The grid going down ... isn't that a bit extreme ? It is like saying "don't by gold because we will be nuked anyway" OR "Government will confiscate our gold.". You can perfectly buy bitcoin now, increase your wealth and at times cash in profits. If you do this before the grid goes down, you can make profits and use them to buy gold or silver.

By the way, nobody can predict what will happen, but the grid going down is a bit extreme. I am sure things can go really bad, but some of the predictions that are being made are too extreme in my opinion. The grid going down is one of them. I am actually willing to take that risk as I don't believe in such an apocalyptic doomsday scenario.

ZorroHedge's picture

Can be. But it didn't happen and I guess like you said, the net is better now. I don't like all this fearmongering. The same with the Venezuela story and that we should all be prepping because Venezuela could come to us:

https://www.youtube.com/watch?v=cDVhj6vAW8g&feature=share

Reality is that if you have money and you live in Venezuela, you can buy food. So the "start prepping" fearmongering is not really convincing me either. I am very well aware a severe crisis can occur, probably worse than we had ever before. But the apocalyptic view that is being spread is maybe a bit overexagerated.

 

deimosaffair's picture

server farm DOES NOT equal internet infrastucture. at most "taking down a couple" of these farms would get the sites down (FB, amazon, etc), not the internet itself.

 

btw, none of those articles even refer to the hipothesys  that taking them down would disrupt the whole net, so wtf did you post the links? go get your facts checked and stop trolling.

Pseudonymous's picture

Yeah, and the mammals are more complex than reptiles. I don't know how well they did during the mass extinction ("collapse") but they sure did pretty well after it. Like with so many things, it's a matter of how long your perspective is. Are you gonna limit your time horizon to a certain amount of time and then try to predict what can and what can't happen within it (e.g. you may be predicting that it's possible that the grid goes down where you are within your lifetime but are you also considering e.g. the possibility that it first goes down and then you get your power restored somehow within your lifetime? One can never predict perfectly.) or are you gonna simply accept the fact that life and the universe don't just end in any foreseeable future, so it makes no sense to limit one's time horizon.

deimosaffair's picture

when electric grid doesn't work, bitcoin is the least of my worries  ;)

but, neither ATMs, credit cards, or even the local mom/pop cash register, so, bitcoin is not that far away from "regular electronic money". actually, the bitcoin mining network is much more "tough to break" than visa/mastercard/national bank networks. a mining node (basic PC + bitcoin software + internet connection) is good enough to store bitcoin/join the network/keep a wallet. compare that to massive needs to run the friendly local bank system (big servers, speciallized techs, proprietary communications, and so on).

so take out power at your city/country (for a week or so). no more "money in the bank". even if bank system survives the massive powerout, there is no way to reach the money.

now try to take out bitcoin. you need to get down at least some 85% of these nodes here: https://bitnodes.21.co/ + global internet disruption of at least 12hrs to get the remaining 15% nodes confused enough to break the whole global network.

anything that can take down all the net plus electric power on a global scale (aliens, nukes, asteroids) will make bitcoin AND money AND gold  worthless. only food and led will still have value. so, until the aliens throw a nuclear asteroid on my head, i will not worry about so much  :)

 

btw, gold + BTC + ETH hodler here. like to keep my eggs in different baskets ;)

 

 

Wow72's picture

Do you have any free gold your giving away? If Bitcoin is worth so much why give it away? Ill take gold if you have it to give a away? I bet your not giving gold away?  I did break down and get some Bitcoin not because I believe in it, but because I know its getting the manipulation treatment.

.

How would the avg person know if they started "printing" MOAR Bitcoin? WE WOULDN’T just like we cant tell how much digital money they create? ITS ALL DIGITAL, They will just manipulate it to make it look like its working. THATS ALL.  They are randomly generated numbers so how could we know how many there are? Other than believing in MOAR B.S. stats they put in front of us.

.

Ill take any free Bitcoin you have? Even though I HATE IT.  Id rather lose your money than mine.  Are these banks not governed by the same bail-in laws? Or are they "Different"?

MoonSun's picture

You can definitely proof how many bitcoins are in circulation. Currently there are 15,649,075 BTC and increasing at a rate of 3600 per day. It is not difficult to check for yourself if you have the right software tool.

You can also proof that some of those bitcoins are forever lost and nobody will be able to redeem. For example, over 50 at address 1111111111111111111114oLvT2 are lost forever and there is nothing anybody can do about it. Think of them like gold being sent to outer space, on its way out of the galaxy. 

Wow72's picture

My point is anything that is digital is vulnerable.  Its just the nature of it, to think someone couldnt get in a create MOAR COINS in a deceitful manner, even lets say they do run out, they will just decide to make MOAR.  Just like going off the gold standard, its the human Nature that wont allow a legit currency or especially the types of people that are in control of the fiat at this point. 

.

Im VERY SCEPTICAL of Bitcoin.  Im not against the idea of it and I hope Im wrong.  How can anyone put trust in anything these days other than something that has no 3rd party involved? If it has a 3rd party BEWARE.

.

Apparently there is some money at stake too?  Pretty soon there will be 500 different brands of Bitcoin? Good Luck?  Bitgold, Bitcoin, BitETC.  I bet my version will be faster, MOAR SECURE, MOAR LIKE GOLD THAN YOURS? Types of Bitcoin could come and go.

Bitcoin requires power, infustructure to exist.  Gold needs none of it, the work is already done.

towjamb's picture

You clearly don't understand cryptocurrencies so please stop talking. You're embarrassing yourself.

MoonSun's picture

You can definitely proof how many bitcoins are in circulation. Currently there are 15,649,075 BTC and increasing at a rate of 3600 per day. It is not difficult to check for yourself if you have the right software tool.

You can also proof that some of those bitcoins are forever lost and nobody will be able to redeem. For example, over 50 at address 1111111111111111111114oLvT2 are lost forever and there is nothing anybody can do about it. Think of them like gold being sent to outer space, on its way out of the galaxy. 

Wow72's picture

They TELL US the unemployment rate is 5% too.  Keep Drinking the KOOL-AID.  YOU KNOW how many DIGITAL bitcoins there are... BULLSHIT

To think Bitcoin cant be manipulated is the CON. 

ZorroHedge's picture

I made 7000 euros in the past 2 weeks with bitcoin. How much money did you make with Gold ? I also invested in gold. I can assure you, even though I made money with it, it is peanuts compared with bitcoin.

roddy6667's picture

I don't think the Chinese family that owns the large "oriental grocery store" in CT will change their sign.

Escrava Isaura's picture

knukles: Why is "Oriental" a incorrect term and "Asian" is OK?

 

Like describing Americans, Mexicans, and Hondurans as Westerners. Also, Brazil has the highest Japanese population outside Japan. Calling Brazilian Japaneses Orientals is more than one way wrong, and offensive to describe Brazilians Japaneses.

 

 

TheSecondLaw's picture

To answer you question, knukles:    During the reign of the British Empire, the east was referred to as the Orient and the West as the Occident.  As a result, people from the east were referred to as Orientals, but people from the colonial empire were not referred to as Occidentals.  Rather as Westerners.   So over time, and thanks to the embedded racism of the British colonial empire, the term "Oriental" acquired a pejorative connotation, like "chink".  From there originated the racist term WOG  - an abbreviation for "Worthy Oriental Gentleman" but meant sarcastically, becuse they were viewed as anything but "worthy".  So WOG had as negative a connotation as "nigger".  And that is why, with the demise of the British Empire, and the rise of anti-racist sentiment globally, the term "Oriental" fell into disfavour.

DestituteYetJovial's picture

I always understood it as Asian describing people and Oriental describing things. "An Asian person made that Oriental vase." It is widely considered wrong to refer to a person as a thing.

38BWD22's picture

 

 

 

Bitcoin now at some $620.  Yay, at least for now.  I broke even at some $490, it took long enough.  Handy link (shows Bitcoin, gold, oil and some other prices):

 

ounce.me

 

Best thing to buy with BTC?  Gold!

Grave's picture

already pushing through 640's :p
i'm still laughing at dumbasses who had a whole fucking year to buy in lower 200's and didn't.
haha, i mean seriously hahaha
you can buy a LOT of stuff on openbazaar with bitcoin, game over amazon/ebaysaurs :D
edit: 670+, already +20% today

wulf's picture

Sometimes I read bitcoin forums, I love to see how euphoria levels are starting to go off the charts.

But, every time the price crashes, the suicide prevention line get stickied in these forums...

RazorForex's picture

Compating bitcoin to chinese stocks? Really? Terrible analogy.

mmanvil74's picture

Anyone figure out how to logout of ZH mobile site? I can't find a logout button anywhere! Wouldn't want Tyler tracking my cookies now would I...

OpenThePodBayDoorHAL's picture

Bitcoin is a thing that goes up. That's cool. But a new payment system for the world? Not a chance.

crazytechnician's picture

It's already is acting as global payment system....

OpenThePodBayDoorHAL's picture

2.6 transactions per second. Fail. >50% of mining power held by two pools, both in China, who can collude anytime they want to determine what the network does. Fail. Legal recognition as a valid asset in any jurisdiction. Fail. KYC for customers using it. Fail.

Other than that, sure, it's "a global payment system", LOL

38BWD22's picture

 

 

 

Bitcoin is no good (for now anyway) in Peru, very few there have heard of it, much less accept it.