"It's Like Buying A Dream" - Mrs Watanabe And South Korean Investors Fuel Bitcoin's Meteoric Rise

Tyler Durden's picture

Bitcoin’s 150% surge since the beginning of the year has caught the attention of “Mrs. Watanabe,” the metaphorical Japanese housewife investor, and a legion of South Korean retirees who’re hoping to escape rock-bottom interest rates by investing in cryptocurrencies, according to Reuters.  

Retail investors in Asia, many of whom are already regular investors in stock and futures markets, are turning to bitcoin in droves. Trading volume on Asia-based exchanges exploded following a Japanese law that officially designated bitcoin as legal currency. And now that the largest Chinese exchanges have reinstated customer withdrawals, the bitcoin market in China will likely stabilize, and the price will likely rise as a result.

Bitcoin was recently trading in South Korea at a $400 premium to its value on US-based exchanges, in part due to tough money-laundering rules that make it difficult to move bitcoin in and out of those markets, Reuters reports.

One of the retail traders interviewed by Reuters said she started with bitcoin because she’s worried she won’t be able to rely on her pension.

"After I first heard about the bitcoin scheme, I was so excited I couldn't sleep. It's like buying a dream," said Mutsuko Higo, a 55-year-old Japanese social insurance and labor consultant who bought around 200,000 yen ($1800) worth of bitcoin in March to supplement her retirement savings."

"Everyone says we can't rely on Japanese pensions anymore," she said. "This worries me, so I started bitcoins."

Another trader noted that most South Korean buyers see bitcoin as an investment; few plan to use it for payments purposes.

The risks for these traders are high, Reuters says, alluding to the collapse of Mt. Gox, which led to hundreds of millions of dollars in losses for its customers.

The digital currency is largely unregulated in Asia. In Hong Kong, exchanges operate with a money-changer’s license, while in South Korea they are regulated like online shopping malls, Reuters says.

There’s also a burgeoning cottage industry of seminars, social media and blogs all designed to promote bitcoin or bitcoin-like schemes. The cryptocurrency world is rife with scams, and pyramid schemes are becoming increasingly common.

Police in South Korea last month uncovered a $55 million cryptocurrency pyramid scheme that sucked in thousands of homemakers, workers and self-employed businessmen seduced by slick marketing and promises of wealth, Reuters reported.

Seminars in Tokyo, Seoul and Hong Kong promote schemes that require investors to pay an upfront membership fee of as much as $9,000, according to Reuters. Investors in these scams are encouraged to promote the cryptocurrency and bring in new members in return for some bitcoins and other benefits.

One Tokyo scheme offered members-only shopping websites that accept bitcoin, 24-hour car assistance and computer problems, and bitcoin-based gifts when a member gets married, has a baby - or even dies, according to marketing materials seen by Reuters.

Leonhard Weese, president of the Bitcoin Association of Hong Kong and a bitcoin investor, warned amateur investors against speculating in the digital currency.

"Trading carries huge risk: there is no investor protection and plenty of market manipulation and insider trading. Some of the exchanges cannot be trusted in my opinion."

Regulators in China have already cracked down on money laundering at local exchanges. South Korea’s Financial Services Commission has set up a task force to explore regulating cryptocurrencies, but it has not set a timeline for publishing its conclusions, Reuters reported.

And Japan’s Financial Services Agency (FSA) supervises bitcoin exchanges, but not traders or investors.

"The government is not guaranteeing the value of cryptocurrencies. We are asking for bitcoin exchanges to fully explain the risk of sharp price moves," an FSA official told Reuters.

Bitcoin was trading $2,529 on Coinbase Sunday, while it traded at $2,593 on Bitflyer, one of the largest Japanese exchanges.

One Japanese finance blogger said his most popular article has been an explanation of bitcoin. Readership of the article doubled last month when bitcoin was on its record run.

Rachel Poole, a Hong Kong-based kindergarten teacher, said she read about bitcoin in the press, and bought five bitcoins in March for around HK$40,000 ($5,100) after studying blogs on the topic. She kept four as an investment and has made HK$12,000 tax-free trading the fifth after classes.

"I wish I'd done it earlier," she said.

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dead hobo's picture

stupid is as stupid does.

My sympathies.

 

Raffie's picture

CRYPTOS 4TW, gold and silver will follow.

 

Clif High – Crypto Currencies Break Loose, then Gold & Silver

https://www.youtube.com/watch?v=ohqKmAz_aeM

Mango327's picture

The global monetary reset proceeds apace. Cheers, Japan. Cheers, Australia. Let's keep it rolling.

IS THE DEEP STATE ATTACKING BITCOIN?
https://youtu.be/PICJk9hz7mw

NoDecaf's picture

Serious question on BC - can they be confiscated electronically? Is there a way to keep a bitcoin offline? Like not stored in a digital wallet or something like that?

Again not trying to stir the pot, even though I am a bitcoin skeptic, just asking to ask.

seabass974's picture

You can keep bitcoin and other crypto's in an offline wallet , held as digital crypto private keys. You can even buy hardware wallets that have been built just for the purpose of storing digital currencies .. they look like USB sticks.   Once you hold your crypto in an offline wallet nobody can confiscate it, unless you give someone access to your private keys.

WhosJohnGalt's picture

I love my Ledger Nano S's.

CH1's picture

Every day a new Bitcoin hater story... an uninformed story, playing to the brain-locked. 

Ah well... history is full of 'em/

38BWD22's picture

 

 

I think Bitcoin is a great speculation.  SPECULATION, as there are probable "unknown unknowns" tucked away there in Bitcoin Ecosystem.

I like BTC, and wish it the best (still as a HODLer).  But, I recently sold off two tranches at $2220 and $2600 for Pt and Au.

The BTCPTB better solve their scaling problems, or else I am OUT at BTC price of $5000 (paradoxical as that sounds).  Maybe even at $3500.  The miners and Core are wankers and cannot (or will not) solve this.  They don't solve it, I will go to ZERO cryptos (at least for now), as the "Alts" are illiquid and hard to understand.

I am not a FUD-er.

And I always read your posts CH1.

sirsmokum's picture

The way I see it is the higher BTC reaches means the more resources, incentive and motivation there will be to solve this problem so it will naturally work itself out. Maybe not right when we want it to but more like at the exact moment that is required.

Notveryamused's picture

https://coinmarketcap.com/historical/20170101/

Instead of Bitcoin, if you invested $1000 in each of the projects ranked 2-11 on 01/01/2017 your $10 000 investment would be worth a total of over $180 000 today instead of just $25000 with BTC.

Similarly you could invest randomly in any 3 projects in the top 10 over the last two years and your average returns would outperform BTC 99% of the time.

Exponere Mendaces's picture

Except... every single alt-coin you point to is an illiquid mess that trades on a few limited exchanges.

None have the network utility and power of Bitcoin.

But naturally, like every myopic alt-coiner, you're so focused on "market cap" you fail to see how Bitcoin is a "prime mover" and remains so to this day.

The rest trade like OTC Pink Sheet stocks.

 

overbet's picture

And what if you lose access to the storage device? Is there a alternate recovery method?

PumpherDumper's picture

Many wallets utilize a SEED.  A series of common words in groups that can be memorized.  Otherwise known as a brain key.  Still others allow you to make your own seed key.  Of course, you could always just print out a paper wallet.

38BWD22's picture

 

 

Very true.  I really like my digitalbitbox hardware wallet.  Same deal: word key (seed).

New_Meat's picture

It depends upon your flexibility.  If you are sufficiently stretched out, your lips can reach all the way to  your ass.

Pladizow's picture

Yes, as long as you have a copy of your mnumonic phrase.

sirsmokum's picture

Copy ad infinitum. Spend once.

Ahmeexnal's picture

When will these deluded souls open their eyes to the fraud of bitcoin?  No pun intended.

Xibalba's picture

It's not even the size of Banco Bilbao Vizcaya Argentaria.  No bubble yet until it eclipes Crapple and Crapazon

kochevnik's picture

You mean only highly placed Jews should print money, correct?

CH1's picture

Rockefeller converted?

Morgan too?

Exponere Mendaces's picture

Yeah, how come people don't realize that fiat is the best? I mean, the USD has 19 trillion reasons go keep on going, right?

And don't get me started on gold, you buy it from the government directly, or licensed coin dealers, and give your money to the government so they can keep on doing what they do. Its a perfect system designed to drain unthinking drones of their money while "sticking it to the man".

LOL

 

daveO's picture

What's used to buy BTC, corn shucks? What's BTC priced in, corn cobs?
"Its a perfect system designed to drain unthinking drones of their money while "sticking it to the man".
Yes, yes it is.

Exponere Mendaces's picture

LOL

Sorry gold holder, I know your "asset" is not performing to your liking, but don't take it out on us Bitcoiners.

We're too busy enjoying our huge percentage gains. We don't need to "stick it to the man", we're rich enough to hire someone to do it for us.

 

Uskatex's picture

No, BTCs cannot be confiscated electronically. They can be confiscated only if you provide the passwords.

Yes, you can store your bitcoin keys in files kept offline in multiple copies, or even in a "paper wallet", a sheet with printed the private key (QR-code) and kept in a safe (however, if this sheet is stolen, the thief will be able to cash your BTCs).

 

CH1's picture

Bottom line: Hold your own keys. (And back them up.)

TwelveOhOne's picture

I believe they can be confiscated if you keep them at a US-based exchange which reports to the IRS -- like Coinbase or Poloniex.

Haven't heard of this happening yet, but, I wouldn't be surprised.

Of course, there's other risk to keeping them on exchanges in different jurisdictions.

And if you keep them offline, you can't trade them.

Dirtnapper's picture

No it can not be electronically confiscated if you remove it from the exchanges.  Once it's on the global blockchain, you are the only one that can move it.   To be on the global blockchain, you have to move it off the exchange into a personal (soft/hard/paper) wallet.  Hardware wallets and paper wallets are perfect way to move your keys ("coins" remain on the blockchain) offline and safe. 

If you keep them on the exchanges, then anything can happen to them.  If the exchange goes under, your "coins" are on a local ledger and is now apart of the assets of the corporation which means you have to deal with federal court to claim your coins.   Do not keep anything on any exchange for any longer then you absolutely need to.

 

NoDecaf's picture

Ok, thanks for the replies all

quesnay's picture

If government wants your bitcoin, they can compel you to give up your private key. Refuse and you go to jail. So in practice, it can be confiscated. A thief can do the same thing (i.e. break in and torture you to give up password).

If your computer can be hacked, then your bitcoin can be stolen. There are no further checks-and-balances. If I can get your private key, then all your funds r belong to me.

https://en.bitcoin.it/wiki/Malware

If your hard-drive crashes and you haven't backed-up your private key, your bitcoin is gone forever.

Exponere Mendaces's picture

Ooh, lets do the same for gold, shall we?

If the government wants your gold, they can compel you to surrender it. Refuse and you go to jail. So in practice, it can be confiscated. A thief can do the same thing (i.e. break in and torture you to give up your gold location or key).

If your home can be broken into, then your gold can be stolen. There are no further checks-and-balances. If I can get your lockbox key or combination, then all your gold belongs to me.

If your bank crashes and you haven't taken your gold out of your deposit box, your gold is gone forever.

LOLOLOL

 

quesnay's picture

Yep, agreed. I'm not a gold bug. I'm just popping the bubble that bitcoin is somehow immune from these things. It is not.

TwelveOhOne's picture

"A $5 wrench" is an excellent password hacking tool.

https://xkcd.com/538/

Sh3epdog's picture

"Bitcoins" are not removed from the ledger - thier more a portion of the ledger itself. "Owning" bitcoins mean's one has a private key that verifies and gives one access to a portion of the BTC ledger. Exchanges don't hold bitcoins, it is impossible to hold bitcoins, again BTC is a public decentralized ledger. Owning a bitcoin or a number of Satoshi's (each bitcoin is composed of 100 million Satoshi's) is really having the private key that allows one to release ownership of a portion of the ledger to another party in exchange for money, goods or services. The numbers or portion's of the ledger - Satoshi's or Bitcoins - may have no inherant worth or value, other than the usefullness they provide as say wealth transmission systems (Typical services aka the bastards at Western Union (A western union to screw over those in the west and especially nonwest!) charge the poorest who typically remit money back to families in other countries 8-15%) While Bitcoin has recently become pretty expensive to send money, remit money, around the world it wasn't always so, and with network changes will likely become very cheap again(There are other "digital currencies" that operate wonderfully as wealth transmission systems in that they charge pretty much nothing, the equivelant electrical cost of sending an email, and some of them are even pretty private, although most that claim to be private aren't really that private).

Bitcoin still is a very secure and reliable money transmission system compared to say the ancient and centralized Swift system. If all BTC could do was be a number/ledger system to send cheaply send numbers around the globe, that wouldn't be very impressive, using the very high security of the BTC system to secure other record systems like say Factom is doing is pretty useful. Factom piggybacks it's system off of BTC's security to (soon) secure property records in south America so that petty dictators can't steal by reasigning the people's property (forging property records) so that they give land to themselves and other political allies. Factom is being designed to secure legal documents, perform cloud storage,  (although less than a system like Siacoin-which is a decentralized mesh network that turns all computational storage space into an unused asset anyone can rent out to anyone securly and privately for compensation) and Fct also is (currently) secureing medical records - with the level of access that say nurses or doctors have at viewing medical data of a patient built into the system already. 

To be sure there's many digital currencies out there that don't seem to offer anything useful at all. Anyone can come up with a number system sort of currency and say there this number is worth that rock you have there! - But that's silly. Kid's will naturally come up with value systems and currencies while playing games, marbles for example. Trading a glass ball for another glass ball is maybe sensible, or two glass balls for one if tastes differ and one is considered more beautiful or such. Currency systems can introduce nonsense, bullshit and trickery however, and it can be bloody difficult not to get wrapped up in any of it in the least bit when it is rather prevelant. But for a kid to come up with an imaginary currency and then convince another kid to trade it for a glass ball they have (marble) is a bad trick. Many of these digital currencies aren't useful for anything, and there's unfortunetely many pyramid schemes out there, and developers just trying to enrich themselves at the benefit of others, some even trying to manipulate the markets to do so (learning and trading digital currencies for the last 2 years I've been burned a bit one one occasion by this sort of thing.)

There is some potential usefullness however in these information systems as they seem to have solved the "Three generals" information/trust problem, that before had not been solved by any sort of known system. Distrust the Bloody IMF's task groups trying to integrate BTC (subjugate the people through monetary manipulation, and bring BTC under thier control) and Distrust Gov issued digital currencies which will likely be used to try and further strip away the people's wealth and freedom's. Besides the three general's information problem solved by these systems only seems to be solved with open systems traded on the free market, best if Governments have little to no involvement, but unfortunetely the markets aren't that free. 

People say Bitcoin is silly magical internet money and comparison's shouldn't be made to gold. Yet gold is just a shiney rare metal one could argue, but then also there is some usefulness when it comes to gold's industrial uses and then for jewelry(jewelry's value being more suspect in my opinion, just look at how the diamond market was rigged by Debeer's and made artificially scarce, and demand was generated through stupid selling of the idea that diamond's must go with marriage proposals - the bigger the better(for Debeers and the like))

Wrote alot more than I initially thought I would on this stuff. It's pretty complicated and fascinating, an interesting thing to try and puzzle out. 

Bunga Bunga's picture

No one controls Bitcoin, so no one can manipulate it. Only your private key allows moving funds. It's all guaranteed by math, not a government. Google 'brainwallet'.

BTFDemocracy's picture

You can take your public and private key bitcoin wallet key and engrave it on a rock and throw the rock on the bottom of a lake and there it is.. until someone finds it, just like your gold.

Justin Case's picture

Problems with Bitcoin

The first question to ask about Bitcoin is will the blockchain scale. By that I mean can it handle lots of transactions per second. The answer right now is a big no. Visa processes 2000 transactions per second. As of May 2017, Bitcoin is processing 320,000 transactions per day or seven transactions per second. There are deep concerns about Bitcoin scaling among technical professionals. It takes a lot of network resources to keep distributed databases up to date.

Bitcoin requires frequent cross-database updates (replication) to maintain data integrity of the blockchain. Bitcoin is using the wrong database schema and I don’t see how it can work with a high transaction volume. Updating the blockchain will always be slow because of all the network checks it must do with every transaction.

I don’t know if the transaction confirmation process can be fixed. If Bitcoin can’t scale vastly higher then it’s a goner. Other digital currencies are designed with much faster transaction speeds but even those aren’t even close to good enough at this time. That’s the problem with the distributed database schema used by digital currencies. It takes far too long for transactions to process. A central server schema would be much faster but loses the positive attributes of the Bitcoin model. I’d be very cautious about putting much money into Bitcoin. Don’t just assume it will all work out. I’ve seen conventional IT projects fail for this very reason. Bitcoin will have to change how it operates in order to scale upward and that means it won’t look anything like today’s Bitcoin.

Bitcoin is a roach motel. You can put money in but good luck cashing out. Any cash-out sale of significant size and the price plummets.

CH1's picture

Bitcoin is a roach motel.

So you hope.

quesnay's picture

Seedy environment (child porn, drugs, murder contracts, ransomware) - check

Seedy characters (pedos, druggies, murderes, ransomware hackers) - check

Sketchy deals and sketchy middlemen - check

I dunno, the label would seems to fit. Maybe later this won't be the case, but right now there is no darker corner on the internet.

Exponere Mendaces's picture

Oooh, lets compare with dollars, shall we?

Seedy environment (child porn, drugs, murder contracts, ransomware) - CHECKAROONI

Seedy characters (pedos, druggies, murderes, ransomware hackers) - CHECKAROONI

Sketchy deals and sketchy middlemen - CHECKAROONI

Well, seems the "label" fits USD and other fiat too... I guess you are going to have to come up with a better rule... lolololol

 

quesnay's picture

Compare the percentage of legitimate to illegal for dollars and bitcoin, then get back to me.

Exponere Mendaces's picture

Maybe construct an argument that can't be circumvented by a small child spun on a merry-go-round.

LOL

quesnay's picture

Argument - bitcoin is currently used a lot for unsavory and illegal activity, therefore comparing it to a "roach motel" has a point.

Retort - "I know you are but what am I?"

Yes, you are right, a small child-like response did circumvent my argument completely. Well done. ;-)

Exponere Mendaces's picture

Okay professor pedant, here's the breakdown.

There are more units of fiat than there are of Bitcoin.

US Dollars have been around orders of magnitude longer than Bitcoin.

Graft, corruption, crime and the other shady bullshit you mentioned have been transacted in dollars long before Bitcoin arrived.

 

Therefore -- the total sum of shady bullshit in dollars far exceeds any sum in Bitcoin.

 

Simple enough? Or do I have to breakout the crayons and paint-by-numbers?

quesnay's picture

It is actually mathematically impossible for Bitcoin to scale in it's present form. 1MB block size limit and blocks produced every 10 minutes on average means 7 transaction per second is the theoretically limit. None of these aspects can be changed without a fork. Forks are bad because they destroy the illusion of immutability. Adoption of a alternate cypto-coin seems more likely. While some of these can handle higher transaction levels in theory, they will run into problems to for the other reasons you mentioned.

Exponere Mendaces's picture

LIES

Scaling has been debated and solutions proposed. There will be an implementation August 1st.

But keep telling us how you are some master blockchain mechanic.

Seems the only thing you can work on, is old car engines, lol.

 

quesnay's picture

Don't get your panties in a knot. I don't claim to be a master blockchain mechanic, whatever that is. I've read a lot about it, but I would not claim to know everything. If you say there is a fix coming, well then mayber there is. I simply haven't read about it. Too bad you couldn't be bothered to post what the fix is ...

Exponere Mendaces's picture

If you're so up on Bitcoin developments, then me doing your own legwork is redundant.

I'm not your search engine.

 

Sh3epdog's picture

There are public digital ledger's, digital currencies, that currently are more powerful and capable than the likes of VISA. Check out Bitshares for example that can process up to 100,000 transactions per second, and can handle with ease 2000 per second with ease - verified in testing, and currently being used in the real world. Bitshares' system can scale up to 100,000 but has been artificially limited to 1000 upon release. Nasdaq for example does about 35,000 tps, and has been tested up only about 60,000 tps, although there are plans to eventually upgrade Nasdaq to 100k tps. There are other digital currency systems like Vcash that also have pretty high tps.

bitshares reference - https://bitshares.org/blog/2015/06/08/measuring-performance/

-Note although Investors and media have turned thier nose up at digital currencies and have refused in the past to deign to list digital currencies on exchanges like Nasdaq - the upshot is exchanges like Nasdaq, and the other big US one, forget it's name right now, have for the past 2 years been working on systems with the architecture inspired and copied from BTC to replace the current trading systems. So traders can scoff all they want at digital currencies and the actual breakthrough in systems engineering, but they'll soon be trading on platforms that utilize such an architecture.