China bans banks from handling Bitcoin trade

The ban came in a notice issued by the People's Bank of China, financial watchdogs and the nation's IT ministry.

Bitcoins were a "virtual good", had no legal status and should not be used as a currency, it said.

The decision comes after bitcoins' rapid rise in value was called a "bubble" by Alan Greenspan, former US Federal Reserve chairman.

The ban was imposed because bitcoins were not backed by any nation or central authority, said the notice.

It added that it was planning to step up its efforts to curb the use of bitcoins to launder cash.

China bans banks from handling Bitcoin trade

I really dont know what this means for bitcoin. I noticed the price dropped sharply a few hours ago but bounced back to 50% of the loss pretty quickly. Personally i panic'ed and sold half my bitcoins right away , probably a decision im going to regret but sometimes its better to be safe than sorry.

There seems to be a lots of haters concerning bitcoins, i think mostly its from people who didnt invest when they were cheap. I think the virtual currency has a future and a place in the existing financial system but its anyone's guess at what price it will eventually top out at. The last few weeks its been hovering around $900-1200 which suggests that it has reached about as high as it will go. Only time will tell right now.

reply to post by PhoenixOD

This isn't really as off topic as it may first seem, in fact it's exactly on-topic:

Tulip Mania

The term "tulip mania" is now often used metaphorically to refer to any large economic bubble (when asset prices deviate from intrinsic values).

Now with most other bubbles, from tulips to shares of stock, we have means of identifying the intrinisic value.

How does one go about even identifying the intrinsic value of bitcoins? What's to stop them from going up to a million dollars each? Why have they had the runup they have? If you bought at $5 and sold at $250 you would have thought you were doing pretty good before this dip:

depann2000.com...


Of course now that person may wish they hadn't sold at $250 but I would still argue they made a good profit if the bought at $5 and sold at $250. When the value is $150 and 30 seconds later it's $105 and 30 seconds later it's back to $150, it doesn't seem like a very stable currency. Why? Because nobody knows the intrinsic value.

here's a website where you can do a little tinkering with the technicals of bitcoin trading....go to the top and change the varibles
www.bitcoincharts.com...

reply to post by Arbitrageur


One of the things i like about BTC is at the moment it is free from bureaucracy. Its something apart from existing money masters that rule this planet.

reply to post by PhoenixOD


However, BTC has rebounded since the new ruling. According to the Chinese government, banks are banned but people are allowed to continue trading. That's because they can't do a damn thing about it. In fact, I would continue to hold. Banning banks only means one thing, they're scared out of their boots. The more bank bans, the better imo in terms of seeing the potential revolution taking place.

In other news, bitcoin now accepted for tuition at Cyprus university

Banning banks doesn't do anything at the present time or future, if you can purchase products and services with it. There are also many other applications for the btc as noted here in this video I watched this morning if you've got 40 minutes. The sky is the limit with this new currency, weeding out the middle man, lawyers, brokers and everyone else with their dirty little fingers in the pie. You can even encrypt contracts directly into the coin. Truly remarkable and an ingenious form of money. Just wait, banks will have no choice but to fold or play if they want to survive in the new dawn of monetary evolution.


I would like to add a side note. Combing the net reading blogs regarding the China clamp, I noticed there are 0 comments on a majority of these stories. To me, this is a HUGE benchmark to gauge just how big this will get. Let me put my thoughts into perspective. The current market cap for BTC USD is 12,098,250,794. That's 12 billion! Market cap for those that don't know, means the total value of a company, stock, commodity. 12B is no chump change. It means there are millions of people trading. But, there are 0 comments on BTC blogs. So what you may ask? Well, to anyone old enough to remember when the dot net took off in the early 90's it was bare bones. No one used email really. Websites were boring. Graphics were challenged and not the very many people owned a desktop. Then Microsoft came out with windows and BOOM here we are today. My point is, this is the new information age with a baby currency valuing at 12B in its first weeks of living (relatively speaking) and no one knows about it. Oooooh people, you just wait....

reply to post by Arbitrageur

How does one go about even identifying the intrinsic value of bitcoins? What's to stop them from going up to a million dollars each? Why have they had the runup they have? If you bought at $5 and sold at $250 you would have thought you were doing pretty good before this dip:

I assume by judging the markets that are using them to trade.

Wachovia was nailed for laundering 378 Billion of Mexican drug money ***, so, it goes without saying that there is a moderate demand for less scrutinized money/currency-asset trading.

This is just one area.

Illegal/legal gambling, *** ,***, ***, which, when you look at it you wonder how the US can even make the determination what with Vegas and all… In many countries is not illegal, so in this case, we have a legal/quasi legal/possibly illegal business that needs to transfer large amounts of money around (possibly in and out of the country.)

Given that the US prosecuted various firms for what they believe is illegal gambling, (but the firms never had operations on US soil) again, there is a market that might make use of bit coins.

I am not justifying nor trying to determine the legitimacy or morality of any of these things, just pointing out that other markets do exist, in many cases in a very grey area. And to ignore them is simply burying heads in the sand.

Whether or not bit coins will be widespread in this markets is up for debate. Personally, I see it very plausible. Not to mention by use of governments in any type of operation that is "off the books" whether or not they publicly condemn them.

reply to post by boncho

Whether or not bit coins will be widespread in this markets is up for debate. Personally, I see it very plausible. Not to mention by use of governments in any type of operation that is "off the books" whether or not they publicly condemn them.

I guess it wont be long before black ops are funded using BTC.

reply to post by boncho

True that it has good points, but it's a double edged sword. All those pluses to improve launderability of money making bitcoins more valuable to some are liabilities for its long term prospects, as TPTB obviously don't want money laundering going on, especially countries that seem to be going broke from spending more than they take in...they want the additional taxes which are evaded with money laundering, plus they would cite other reasons too.

So it will be interesting to see how this plays out long term.

Arbitrageur
reply to post by boncho

 

True that it has good points, but it's a double edged sword. All those pluses to improve launderability of money making bitcoins more valuable to some are liabilities for its long term prospects, as TPTB obviously don't want money laundering going on, especially countries that seem to be going broke from spending more than they take in...they want the additional taxes which are evaded with money laundering, plus they would cite other reasons too.

So it will be interesting to see how this plays out long term.

That's assuming "TPTB" is one all encompassing term denoting a few individuals that work in tandem and unity. However, the powers that be, or the controlling power, in real life is often a good number of people fighting each other. So some might like it, some might hate it…