Crypto Thoughts — End of Crypto Dream or Bitcoin in Honey badger mode?
Note: This article was originally published in Crypt Bytes Tech.
Background
In the ongoing rumors post PBOC directive on ICOs that all cryptocurrency exchanges will close down, on 13th Oct Bitkan, one of the top OTC apps in CN, decided to suspend OTC services in response to the latest regulations.
This reflected the frenzy selling as observed since earlier this week in not only Bitcoin but across the board for all Cryptocurrencies.
The Downfall
It all started from Chinese Sina publication which reported that “Regulators say all the transaction platform related with Bitcoin will be shut down will not operate in China market. Probably include other cryptocurrencies.”
Then came the rumors that one of the most searched weibo key word is ‘all bitcoin exchanges in China will be closed and like google or twitter trends weibo key words is normally the wind before storm.
Well western commentators felt that this are one of the regular FUD coming out of Chinese rumor mills as if they haven’t learned how to circumvent the Chinese internet. As many Chinese there use services from google etc using vpn and they raised the question How is this any different, and that this may be a temporary suspention.
Though the news was unconfirmed, after some time the news came that BTCChina exchange will stop all its trading by September 30. Though it would not impact BTCC’s other operations like BTCC Pool, BTCC USD Exchange, BTCC DAX, BTCC Mobi, & BTCC Mint by this change. Though it raised speculations over the future of even Mining operations in China.
And then like house of cards started falling and news of other exchanges closing down came.
On September 4th, China’s central bank together with six other departments released a public statement on regulation policies and warning the risks of ICO projects. As a responsible cryptocurrency exchange platform, ViaBTC (www.viabtc.com) has made a serious decision to carry out the spirits of the policy — we will officially close the website www.viabtc.com for exchange business in Mainland China on September 30th. Before that we will complete processing of all withdrawal requests of CNY and cryptocurrency assets. ViaBTC mining pool (pool.viabtc.com) and cloud mining services will not be affected.
The arrangements are as follows:
Sept 25th: Closing of registration, asset deposits and all trading pairs
Sept 30th: Closing of website www.viabtc.com
Both the BTCC & ViaBTC were one the major exchanges in China that not only conducted ICOs but were also supporting various types of Tokens. And even there closure statements were conspicuously similar like they were dictated to write what they wrote.
Post this news the market reacted very poorly and within minutes of their news accelerated the panic sell in not only BTC buy across the board. One of the biggest looser was Litecoin(LTC) which depended on China for its volumes and market went in Deep Red. And Bitcoin lost almost extending its losses in overnight trading to reach a three-week low of $3,275. This represents a 35% drop from its high of $5,000.
Crash below 3000 USD
While ome believe that the price of Bitcoin will reach a low of $3,000 and will be followed by a rally back into the low-$4,000s. But then the news came that Yunbi was also closing its trading services by Sept 20.
At one point it even reached 2800$ and many traders were expecting it to reach 2500$ levels and many went on buying spree.
The above news pretty much added to the volley of bad news that for OKCOIN and Huobi, latest announcement release deadline for closing their exchange is 15th 24:00 Hrs. Latest closing deadline is 20th 18:00 Hrs(Beijing time).
In this bloodbath total market dropped below $100bn and though the experienced traders and experts told to “Just HODL” at that point and for other to “Prepare to BODL” but for many it was a dark moment. It was evident there will be little to no buy pressure originating from China for the foreseeable future. With $890m in 24-hour trading volume, the vast majority were sell orders and people dumping for whatever price they can get their hands on.
Many though that this is the “End of their Crypto Dream” and the bearish run of Cryptocurrencies was over.
Now this reflects one of the biggest problem is real liquidity and volumes in the market which comes to Bitcoin with virtual ban on Chinese exchanges the volumes will drop and so will large scale adoption. After these only Korean and may be Japanese exchanges will be there with some good volumes.
Bitcoin rebounds “Honey badger mode”
And then in the evening suddenly from below 3000 USD levels like a Honey Badger Bitcoin rebounded and recovered much of the lost ground by late evening.
Much of the recovery was attributed to the below tweet and to the fact that US traders woke up to cheaper Bitcoins and went on buying spree.
One thing was clear Market is becoming efficient by reacting to news.
Some experienced trader felt market oversold a bit. Btc has strong fundamental because for people just trust value storage in peer to peer distributed system which is more decentralized. BTC or even Money is what people see value in, its same as people in Zimbabwe thought USD has more value than their own currency.
That’s what politicians do, They want to seem to be in control
The 19th congress & reshuffle is the biggest thing in a century in China, especially given they’ve just regained control as a global super power (30yrs ago they were like the Korea today).After figuring out western methodologies of business & adjusting there style over the past 30yrs to achieve this success & wealth.
The meeting above is about whether to continue on this tangent of controlling people, power & growth aimed to retain that power & wealth for centuries to come
So if they decide to give people more free reign all these types of systems will survive. If they decide to tighten the hatchet on there current operating/governance style all will be buried quicker than you can blink.
So though the news is not related to any crypto, bitcoin or bitcoin cash but the current crackdown is attributed to bring back control and not have any issues cropping up during the 19th congress in Beijing convened by Communist Party on October 18.This is a political long term power hold of nation going with & for freedom or against freedom.
Finally
China decided to manipulate the market again by saying some exchanges can stay open till end of month. Some have developed interesting conspiracy theories like — Knowing that North Korea is getting slapped with heavy sanctions, China is manipulating the market down to allow DPRK to buy up as much as they can, then on the spring board back up they will make more dollars without violating any sanctions. The truth is when btc drops there will be bad news coming with it to “support” the drop. It will scare off weak hands. feel free to let go and sell your coins for stronger hands to buy.
