Bitcoin Slides After China's Central Bank Holds "Closed-Door" Meeting With Exchanges

Tyler Durden's picture

The Chinese were bust over the Golden Week holiday... buying Bitcoin (up from 6350 to 7550 in Yuan). But now that the vacation is over, China's central bank is back to its crackdown and following reports of "closed-door" meetings with various Bitcoin exchanges, the virtual currency was sent tumbling this morning.

 

 

As Bloomberg reports, officials from the People’s Bank of China are meeting Wednesday afternoon with representatives from a number of the nation’s trading venues, the people said, asking not to be named because the meeting is private. Money laundering is among the topics on the agenda, said one person without elaborating.

The cryptocurrency has reacted sharply to reports in the past that China may tighten rules on the digital currency to curb capital outflows. The Wednesday pow-wow follows a regulatory inspection of exchanges including OkCoin, Huobi and BTCC in January. Bitcoin had risen by 120 percent over the past year as investors made purchases to hedge against yuan depreciation. The central bank didn’t respond to a faxed request for comment.

 

“There are a lot of people shorting bitcoin now, one because of the regulatory environment, another because the price is relatively high,” said Tian Jia, a Beijing-based trader of bitcoin. “The fact that PBOC continues to look into this issue might make people think that the whole thing isn’t over, and based on past trends, whenever the central bank holds meetings with exchanges the price will drop.”

 

China has taken a central role in the bitcoin market in recent years as its citizens have become leading traders and miners of the cryptocurrency. Their interest has been fueled by the hunt for alternative assets, zero exchange fees and the low cost of electricity to run the computers needed to mine the currency. But any increased scrutiny from government authorities may dampen purchases of bitcoin in China.

The last time PBOC 'probed' the exchanges the reaction was dramatic (but as is evident, the effect was to kill volumes and control that capital outflow)

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highandwired's picture

I'm sorry but whoever wrote this article for Bloomberg has his/her head in their ass!

 

"China has taken a central role in the bitcoin market in recent years as its citizens have become leading traders"

uh they were leading in HFT manipulation(suppression) of BTC maybe up until January

"the low cost of electricity to run the computers needed to mine the currency"

wrong again.  Many Chinese miners were/are stealing electricity to mine BTC https://www.cryptocoinsnews.com/china-oil-bitcoin-mining-theft/

 

This has NOTHING to do with money laundering.

The PBOC is holding "closed door" meetings with the exchanges to figure out how to keep suppressing the price of BTC.  It's not going very well for them though.  :(  

 

Screw you PBOC

USisCorrupt's picture

China will soon embrace Bitcoin and make it part of their monetary system, it sure is better than the dollar and China realizes this.

magnetosphere's picture

in actual fact the usa is far more totalitarian in terms of trying to control and regulate bitcoin.

highandwired's picture

I don't think "China" or any other countries will get onboard BTC anytime soon.  The market is just too small for them to do so.  $20 Billion marketcap for ALL crypto is a total joke.  

If "China" the country tried to "embrace Bitcoin" they would destroy their own currency, the RMB.  I also don't think they want to do that.  Hency why the need to suppress the price.  

Your theory might come true when BTC is many multiples of the price it is today.  

 

 

Edit for the junkers:  "The central bank of Japan will not be applying blockchain to its payments and settlement systems any time soon, the institution has said."

http://www.coindesk.com/japan-central-bank-blockchain-trials/

PumpherDumper's picture

$20 B marketcap is a joke?  That is because you are used to thinking in terms of the limited, factor of 2, divisibility of the dollar.  Bitcoin is divisible by EIGHT factors.  The expandibility of bitcoin to meet the needs of everyone is quite obvious...unless your head is up the ass of the Fed and their pet dollar.

The RMB can be linked to bitcoin, just like the dollar is linked to petrol.

Those who wish to have wiggle room in their accounting would not be looking to have a public double ledger now would they?

highandwired's picture

WTF are you talking about?  I said that it's a joke that if any serious money would want to enter Bitcoin, the price will explode and destroy the fiat currencies.  

If even one company, Blackrock "with control over $5.1 trillion in assets"  http://www.zerohedge.com/news/2017-02-08/larry-fink-turns-bearish-sees-s...

would try to enter the space it would obliterate the fiat regime.  It's impossible for central banks to enter Bitcoin in the near future....unless...as I've stated, Bitcoin is many many multiples of the price it is today.  

Do you have trouble comprehending what others are writing?  

Equinox's picture

Fuck the central bank, bitcoin will be a legal way of payment in 2 months from now.

 

https://news.bitcoin.com/countdown-bitcoin-legal-payment-japan-two-months/


USisCorrupt's picture

This could very well be the Temporal marker that Clif High was talking about that was to happen on the 5th, a few days late is just fine with me.

LONG & STRONG BITCOIN !

I'm with TRUMP !

USisCorrupt's picture

This meeting is a VERY Good sign.

Jtrillian's picture

Aside from a potential vulnerability in the code, Bitcoin may fluctuate as the central banks gasp their last breaths, but Greshams law dictates that Bitcoin and other better forms of money will rise as fiat currencies die due to too much stimulus. 

China can only do so much to slam down the price of bitcoin.  Unlike gold and other pm's, there are no paper contracts that use ratios and other manipulation to artificially keep the price of bitcoin down.  In other words, while precious metals will eventually skyrocket with the death of fiat currency, bitcoin will launch first.  In fact, it already has.

Bitcoin has one tremendous advantage over precious metals.  It can be exchanged electronically anywhere in the world.  Precious metals are often confiscated or outlawed entirely during times of currency crisis.  In addition, China has been flooding the marketplace with fake precious metal coins for a while now and SOME of them can be hard to spot.  X-Ray Spectrometer's tend to be expensive.

Bottom line... unless you believe that fiat currencies are sound, diversify into some bitcoin.  Buy the dips.  Not a bad idea to have other hard assets as well to limit your risk but Bitcoin may indeed be one of the few investments that truly goes to the moon as people lose faith in their respective currencies.  The higher Bitcoin goes, the more people will freak out and flood into it. 

Having said all of this, bitcoin has value only so long as 1) the blockchain remains in tact and 2) people have faith in it.  The moment the blockchain becomes unaccessable (via corruption or governments limiting acess) or people abandon it for something else, it too will become worthless.  For now, that does not appear to be the case. 

Raffie's picture

Btc is already going back up.

Been going up nicely for past week so seeing it get a drop is not a surprise.

Japan approved Btc as legal currency and will start in April 2017.

crazytechnician's picture

OH SHIT BITCOIN CRASHED !!!!

To where it was yesterday. Yawn.

wildbad's picture

a transactional mechanism YES!

a store of wealth? only for fools

zipit's picture

I love the smell of money on the sidelines in the morning.

CJgipper's picture

If China is having closed door meetings on how to destroy bitcoin and it goes up in the face of this....... bitcoin is here to stay.  

I think at this point, you're a fool not to toss a few grand in and take the free car. 

Dirtnapper's picture

Meeting is bad news?  China is clearing out the rats nest in the exchanges for more stability.   This looks like China is setting the table for recognition of BTC as a currency, like Japan is currently doing this Spring.  It dropped about $40 and now it's ony down $20.

CJgipper's picture

No way.  If they do that, it's bitcoin 100k, yuan 0.  The government would be bankrupt overnight, unless they're buying MASSIVE quantities of bitcoin on the quiet.

BadDog's picture

China cleaning up the exchanges to get ready for the big reset.  Gold, silver, bitcoin.  Exchanges will have to actually be in possession of the bitcoins that are being traded.  No more COMEX like bitcoin in China would be my guess.

Dennisen's picture

Repeat after me...

Get prepared for the worst
Then watch others who are not
Constantly and predictably
React to a world of fears

Nomad Trader's picture

Pretty sure no one on this site cares about Bitcoin.

Last of the Middle Class's picture

Next they'll super glue up all the USB ports on everyone's computer so as to stop the bitcoin USB thumb drive mass exodus going on.

gunzeon's picture

"slides" ? Really ?

$21 = 2% = noise in bitcoin land

f'ken "Tumbling" lol ! gtfo !

Justin Case's picture

The reason exactly why it will never be used as a currency.

gunzeon's picture

Bitcoins can be used like condoms; when you need one you buy it, use it, then get rid of it. Irrelevant what they're worth, s'long as they work.

Sure, I agree, nice if they appreciate, but that's not the ideal use of them, trustless peer-to-peer internet value transfer is what it's about.

and, Bitcoin is merely the first cut.

 

 

 

crazytechnician's picture

I thought it was already being used as a currency ?

vasallo7g's picture

try booking a travel or buying a car in Venezuela, its the only currency accepted

Justin Case's picture

Famous last words: Gov'ts can't do FA about bitcon.

misterb4096's picture

It's up $20 in 2 days, went up $40 yesterday and corrected today by $20. How the fuck is that a "slide"? It "crashed" down to $750 recently, maybe a month ago, then "down" to $900, and now it's all the way down to $1040. Boy am I a dumb fuck for riding out all of these "crashes".

@wildbad: How is it NOT a store of value? Does it rust, spoil, or otherwise expire?

@nomad trader (member for a whopping 20 weeks): If no one here cares about bitcoin (totally false) it would only be because the quality of the ZH readership has gone to shit, and we have retards like you to thank for that...

 

 

Prisoners_dilemna's picture

BTC will be legal tender in Japan in two months.

 

MoonSun's picture

No legal tender, but making progress.

HenryKissingerChurchill's picture

they just put a nailgun on each bitcoin excahnge C*O forehead and friendly asked for the server keys...

just like the USA does...

Exponere Mendaces's picture

Oh Zerohedge. Sometimes you are talking a positive Bitcoin book, sometimes you just put up a tick-chart with an exaggerated price axis just for lolz.

Guess where we're at, USD wise? Oh yeah, 1,052.83 (Bitstamp), which puts us past the mid-point of the past decline. Some "tumble", lol.

We've had retraces before on Chinese rumors, and this one was no different. But hey, if it makes an article ZH can plaster ads all over, why not, right?

Stick to covering other assets, Bitcoin isn't your forte, Tyler.