Bitcoin China Soars To Record High Amid Capital Control Concerns

Tyler Durden's picture

While Yuan rallied following last night's trial balloon by the PBOC - when as reported overnight the PBOC was studying possible scenarios of yuan exchange rate and capital outflows in 2017 based on models, stress tests and field research, and is preparing contingency plans - Bitcoin in China soared to new record highs amid massive volumes.

It appears fears of crackdowns on "virtual" currency outflows - as described by China researchers - is not there yet as the momentum-chasing Chinese have found a new friend as Commodities crumble.


In USD, Bitcoin remains just shy of record highs:

But as we noted earlier, for those buying into bitcoin here on the momentum, most of which originates in China, we urge readers to be cautious as by now the PBOC has certainly noticed that the digital currency remains one of the final, and most successful, means of bypassing capital controls in China. Should Beijing mandate that bitcoin no longer be a means to illegally transfer capital offshore, there is risk of a dramatic, and sharp, drop in its price.

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Arnold's picture

Let me see if I can do an overlay chart.

Bitcoin and Goldman Sachs.

Oh, I havn't thanked Blythe in a while.

Paul Kersey's picture

How to become a millionaire overnight. Great 4 minute video. Surely it can't happen here.

cayman's picture

Meanwhile, gold sits on its ass.  Wtf.

MillionDollarBonus_'s picture

As many astute readers on here have pointed out, what if a meteor hits the earth and blows up every hard drive and network device in the world all at the same time? If that happened, your bitcoins would simply disappear, and that’s just not a risk I or any other sensible person is willing to take.

Haus-Targaryen's picture

I'd love to see a 20% devaluation overnight.  

Manthong's picture

..just as long as it is not a bubble or anything.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) Manthong Jan 4, 2017 10:20 AM

My prediction is that Bitcoin moon-rockets to $3000 USD, crashes back down to $1500 and that will be "evidence" for the boneheads who post here that "Bitcoin has failed".

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) gatorengineer Jan 4, 2017 9:37 AM

It dawned on me the other day that Zerohedge users are so clueless and far behind that they also have no experience with Bittorrent or Bitmessage either.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) Haus-Targaryen Jan 4, 2017 9:45 AM

Don't feel too bad ZH peoples... another fudd who doesn't understand Bitcoin is named Bill Gates.  And he's one of teh richest dudes on Earth.

solid12345's picture

And as other people have pointed out, if things get so bad that our entire internet and electrical grid is destroyed, I doubt gold is not going to do you much good either, you'll want food, ammo, land and a good well. But even then is such a world worth living in? 

gatorengineer's picture

Mad Max wont come overnight.  first there will be currency controls, and bans on cash most likely 100s and possibly 50s.  This is the time when gold will shine its brightest.  If they can contain it at that level (the cities will be the problems), then it will devolve into mad max, and then barter ammo and gun pats will be the best.

solid12345's picture

And as other people have pointed out, if things get so bad that our entire internet and electrical grid is destroyed, I doubt gold is not going to do you much good either, you'll want food, ammo, land and a good well. But even then is such a world worth living in? 

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) solid12345 Jan 4, 2017 9:42 AM

No that is more BS, Bitcoin exists with or without a power grid in your country or area.  If the grid went down I would sleep easy knowing all my Bitcoins are fine.

Pseudonymous's picture

Actually, that's a much more precise way of describing the risk that could lead to the disappearance of Bitcoin, compared to other scenarios I've read around here.

kamikun's picture

MDB, you're slipping. Careful you don't overplay the part and let the sarcasm show.

jmack's picture

  What if the meteor if full of hundreds of tonnes of precious metals?

GodSpeed_00's picture

You posters who keep taling about "if a meteor hits the earth", "if there is a solar storm", "if all electricity dissappears". What you don't get is that if all that kind of stuff happens your gold will be worth fuck all as well. Only thing of value will be food, water and weapons. Think somebody is going to give up their food in uncertain times for gold? Fuck no.

SomethingSomethingDarkSide's picture

Gold would like to be up and running but is weighed down by dollar strength aka US' trading partners are printing like mofo's.  Buy PM's in multiple denominations, they just pass the printing hot potato every now and again.

Arnold's picture

There's just no attraction there Paul.

I figured I had 300 days of Christmas last year and am content with that.

Oh, and beer.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) Arnold Jan 4, 2017 9:32 AM

What are you trying to say?

Arnold's picture

I'm saying, partly in jest, banks are the middlemen in the tranaction between Yuan and say dollars via bitcoin.

The wallet does not do currency exchanges.

And Blythe Masters, a developer of Credit Default Swaps,

has become another middleman layer in the transaction between Yuan and dollars via alt-digital currencys.


And Goldman Sachs stock is going to the moon on the same trajectory as Bitcoin.

Prisoners_dilemna's picture

Some BTC buyers may use the exchanges for convenience.

Many utilize

Bitcoin disintermediates, any reliance on middle-man banks is merely a vestigial and familiar approach by buyers.

FinTechNerd's picture

It's not stoping here folks. 

hotrod's picture

cup and handle baby.  Wait for the handle and this dude is ready for 2000.  Sell everything you got and get in.  These aint no Tulips

gatorengineer's picture

No tulips were at least tangible and produced pretty flowers.  At 2k, thats 32 Billion dollars.  Are you going to change todays world with 32 Billion dollars that are in 2k increments that you cant make change for?

Flawed from the start.  If you had a digital currency that had a possible number combination of say 16 Trillion units then you might have something, and had something that was physically able to be held as well as electronically transmitted.


Kaervek's picture

You can divide a single Bitcoin up to 8 decimals, so at 2k that's $0.00002 increments.

Also, 32 billion is not that much, the ECB prints double that amount each and every month.

hotrod's picture

Time for Bitcoin 2.  Bitcoin too expensive, buy the new edition.

Arnold's picture

Occaisionally I will repost one of my better ditties.

Here it is.



Well without changing definitions much, Bitcoin is being manipulated.

The Chinese seem to be moving funds out of country, contrary to their law.

There is not a stable exchange rate,

and a skim for the exchange for Yuan to bitcoin to usable fiatski,

a FX play out of control since there is only one viable road for this series of transactions.


The cost of doing business in Bitcoin is going up for the time being.

Arguably inflationary.

Bubble? Ponzi? Investment?

PS, Please do not give anyone educated in the sixties crap about math skills.

We may not have a corner on Einsteinium, but many of us can balance a checkbook in our heads.

iLLivaniLLi's picture

What is it with Leftists valuing skills that were valuable in the previous century? Mental mathematics became high status and social signalling fodder once calculators were ubiquitous. The Labor Theory of Value became popular once world population started exploding and industrial automation was already under way. Ask a Marxist, if all value is begotten through human labor then do trees and wild animals have no value? Enjoy the mental gymnastics that follow. They want to say human labor(time) is universally equal precisely when technology begins to obviate that conjecture. They are disingenuous ideologues at best, just plain dumb more likely.

Arnold's picture


Two bits of reading for you.


Every sentence you wrote contains a logical fallacy.


Failed Turing are ya, looking for practice?

moneylover3's picture

Is gaycoin even legal?

New World Chaos's picture

If the Chinese people are smart, they will use Huboi a stopping point en route to personal storage or overseas exchanges.

I don't know if the government forbids this.  I think it would be very difficult for them to enforce it.  Only way to stop this highway traffic is to block the on-ramps.

When the inevitable government crackdown comes, people will be able to dribble the BTC out of the overseas exchanges.  They will get Yuan, favors from Chinese merchants looking for the latest gamble / inflation hedge, foreign currency in overseas banks, etc.  It might become a risky game but less risky than selling gold in Venezuela.

A price disconnect will develop between BTC in China and BTC in the rest of the world.  This is already happening.  Happening in India too (though expect less pumping and less pushback from India due to fewer people on the internet).

At some point, exporters will figure out that they can underprice their goods and collect the difference in BTC.  The only way for the Chinese government to stop this would be for them to become so intrusive that they strangle the Internet or strangle exports.  Game Over either way.

Point is that the Chinese government can slow BitCoin's rise, maybe even trigger a correction, but they can't stop BitCoin.  If (when) BitCoin fails it will probably be due to scaling problems leading to high fees and creeping centralization, which will defeat the purpose of owning BitCoin in the first place.  But for now, it is being driven by a Chinese desire to bypass devaluation and capital controls and people know that this desire is larger than the market cap of BitCoin.

Long term, PMs are better.

dasein211's picture

I'd say even then, switching to Dadh or another crypto would happen. The crypto cat is out of the bag. I'm sure a lot of Chinese are reading and studying Bitcoin right now. When you finally understand it for what it is it's mind boggling. I'm sure the Chinese miners have their and many of their clients Bitcoin moved offshore already. The longer the Chinese govt waits the ore time the Chinese people have to plan to move out their money.

gatorengineer's picture

What do you make change for a Bitcoin in?  Only 16,000,000 of them in circ.   I bet the dutch had more tulip bulbs 

16B total value, one well placed EMP and priceless.

Saro's picture

You can send fractions of a bitcoin. The smallest unit that can be sent in a transaction is 1/100,000,000th of a Bitcoin, (affectionately known as a "satoshi", after the creator).

GodSpeed_00's picture

You really shouldn't talk about things you're ignorant about, it makes you look dumb.

NoBillsOfCredit's picture

Should Beijing mandate that bitcoin no longer be a means to illegally transfer capital offshore,...

Really? What a stupid thing to say.

wulf's picture

Buying bitcoin is certainly the quickest way to enrich early adopters, Chinese miners, and ponzi schemers worldwide.

For all the rest, it's just a risky game.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) wulf Jan 4, 2017 9:34 AM

No its risky for old fudds and geezers.

commander gruze?'s picture

Early adopters? For sure, it's called risk premium.
Chinese miners? Maybe, it's called business.
Ponzi schemers? Stop smoking that shit.

It is incredibly risky for anyone to *not* own at leat $10 worth of bitcoin right now. Stashed away on a paper wallet and backed up in your parent's/children's place.

Blopper's picture

Baring no news of exchanges getting hacked and multimillion dollar accounts stolen, there will be NO "dramatic, and sharp, drop in its price".

No apologies but this is NOT your usual stock market.

kamikun's picture

I love bitcoin more than the next guy, but having been on this ride for four years now ... Bitcoin's history is a series of dramatic booms and almost equally dramatic implosions in price. Sort of like 14 steps forward, 13 back, and then crawl on your hands and knees for a few months.

The price will drop. Maybe it'll go back to triple digits (!). And as a bitbug and goldbug - I'll see that for what it is: an opportunity to get moar! And hodl!

Why Bother's picture

Bitcoin, physical gold, physical silver: the decentralization locomotive, the voluntaryist locomotive that progressives, neocons and Trumpists hate the most. It's great fun to laugh at those assclown statists while we build up wealth.

katagorikal's picture

Current Bitcoin rates are:

1 XBT = 1,132.66 USD = 8,342.99 CNY

So implied USDCNY exchange rate of 7.36 
compared to the official rate of 6.95