China’s Bitcoin Snit

Oh, China, China China. Thought those guys over there were smarter than this. Everybody (with a bruised ego, including Central Bankers) knows that you can’t manipulate a market forever. You think you can, YOU CAN’T. So while China tries to “jawbone” the bitcoin market “over there”, the huge new volume in trading will disperse to new hubs (London, NY, etc) globally. Deal with it.

Overnight (in the US anyway) China is once again holding closed door meetings with their domestic bitcoin exchanges heightening fears that tighter regulations and oversight of trading in digital currencies. The PBoC is very concerned with capital outflow with its foreign exchange reserves falling and the fear of a currency drop. Guess considering bitcoin IS a currency now makes China an all purpose currency manipulator.

China’s central bank is holding a closed-door meeting with several domestic bitcoin exchanges on Wednesday, people familiar with the matter said, heightening concerns that regulators will tighten their oversight of trading in digital currencies.

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.

The price of bitcoin plummeted after Bloomberg News reported on the discussions. The digital currency had strengthened as much as 1.7 percent earlier but then reversed course and was down about 2 percent by 4:30 p.m. China time, according to data compiled by Bloomberg.”

Read Full Article at Bloomberg