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Beijing Threatens Shut Down Bitcoin Exchanges

Beijing Threatens Shut Down Bitcoin Exchanges

China’s central bank has warned domestic bitcoin exchanges they risk being closed if found violating the country’s currency regulations. The warning came as the regulator tries to curb capital outflows following fears of continued weakness in the yuan.

A sign for foreign currency exchange is seen in Beijing © Thomas PeterBitcoin plunges on Beijing plan to bring cryptocurrency exchanges to heel

On its website, the People’s Bank of China (PBOC) said it has told the exchanges not to take part in financial activities such as margin lending or allow money laundering.

If such a violation is found “the circumstance will be serious,” and an inspection team will close down the offending exchange, PBOC said.

“People in the industry are watching if the regulators do more,” Wen Hao, founder of Bitpie, a Beijing-based bitcoin-related business, told the Wall Street Journal. “They’ve never said they would close a business. Based on that statement, they are getting stricter.”

Chinese regulators met with the country’s three largest bitcoin exchanges last month to remind them to “strictly” follow relevant regulations.

Demand for the virtual currency in China has been rising in recent months, fueled by yuan’s depreciation. A bitcoin was trading at about $1,065 on Thursday.

The cryptocurrency more than doubled in value in 2016, up 126 percent on the year. The Chinese yuan, on the contrary, suffered its worst year on record, weakening 6.5 percent.

China accounts for about 90 percent of all bitcoin trading on exchanges. The country has strict capital controls, which makes it difficult for the Chinese to convert the yuan into foreign currency and limits the amount of cash investors can move abroad.

That pushes Chinese investors to use the digital currency as a way to circumvent capital controls and minimize risk from the falling value of the domestic currency.

Bitcoin's rally to become last year’s best-performing currency has caught the attention of Chinese regulators concerned the virtual asset was contributing to capital outflow.

Data released by PBOC this week showed China’s FX reserves fell below $3 trillion for the first time in six years in January. They declined by $12.3 billion to $2.9 trillion.

Beijing has spent more than a quarter of its reserves propping up the yuan over the past two years. The reserves fell by $320 billion in 2016, after a record drop of $513 billion the previous year.

Bitcoin Gambling Investments 5/12

Bitcoin Gambling Investments

This month we finally made our first 1 Bitcoin in profit! Thanks to the the great sites we are invested in 🙂 It has now been five months since we started our Bitcoin Gambling Investments experiment and we have now made a 23.66% return on a Bitcoin basis and a 96.89% return on a USD basis.

In aggregate our initial 5 Bitcoin Investment is now worth 6.18321 Bitcoins, or on a USD basis our $3000 investment is now worth approximately $5907. This month we saw a big growth in the USD and a good return from the Bitcoin Gambling sites.

A summary of the investment returns on the current Bitcoin Gambling sites held is tabulated below:

Bitcoin Gambling Investments

A plot of the weekly returns from all site investments (running and discontinued) is below:

Bitcoin Gambling Investments

This month we added KingDice to our list of investments and have been impressed with the site and returns to date. You can read our review of KingDice here and watch our video review of KingDice here.

If you read our last post you will know we were disappointed with the returns and risk profile at Bitvest and as such removed our investment. The developer and admin known as Zodiac proactively created a survey for all bankroll investors and responded to the survey leaving the following comment on our last post:

Our profits are back up to 45+ BTC now at Bitvest. The main reason for the extreme volatility was betting volume increasing over ten-fold around the time we released dice. We also had a few extremely lucky players, including a couple jackpots in a short period.
The risk levels were also determined to be somewhat too high, so we’ve reduced them in general over our more volatile games.
We welcome you to try out investing with Bitvest again, our bankroll has nearly doubled in size in the past two months.

Bitvest Developer & Admin,

Zodiac

We are really impressed that Zodiac has made a change so quick to the volatility issues on the site and we will watch it closely over the next month. If their is an improvement we will look into invest again into Bitvest!

SafeDice and Crypto-Games have again continued to grow relatively similar to their past results which we are very happy about. SafeDice has attracted more investment and appears to be getting a lot of betting volume.

Bitcoin Gambling Investments 5/12 Summary

Overall the total return after five months of 96.89% on a USD basis is incredible and way above what we expected given the risk profile. The addition of KingDice so far has been positive and SafeDice and Crypto-Games continue to perform well. As we have mentioned many times the main risk we face is a catastrophic event of a site running off with our funds but that has yet to happen. Hopefully the last 7 months of our experiment will continue to produce great returns!

IRB Warns Against Bitcoin Breaks USD 1,000

Bitcoin Breaks USD1,000

The price of Bitcoins went over $1,000 near the end of the week, thanks to a bull run that started on Tuesday and hasn’t subsided since. Only less than a month ago, the price took a steep dive from a similar position to $880, while subsequent market events didn’t give it room for any further growth. But now, with the value of BTC once again back to similar heights, the real question is will it hold this time?

The price of Bitcoins went over $1,000 near the end of the week, thanks to a bull run that started on Tuesday and hasn’t subsided since. Only less than a month ago, the price took a steep dive from a similar position to $880, while subsequent market events didn’t give it room for any further growth. But now, with the value of BTC once again back to similar heights, the real question is will it hold this time?

In other news, US Congressman and Bitcoin supporter Mick Mulvaney, whom we talked about in our recent update, has been approved as Budget Director by a narrow vote of 12-11 at the Senate. The strongest opposition came from the Democrats, who criticized him for his fiscal positions, but also his failure to pay $15,000 in taxes for his babysitter, for whom he had to back pay and face fines.

However, Bitcoin supporters might find less to be worried about, as Mulvaney was a co-founder of what is known as the Bitcoin Caucus (Congressional Blockchain Caucus), which he established to keep Congress up to date on blockchain and cryptocurrencies and create policies to promote them. He also supports Coin Center a non-profit center focused on policy problems virtual currencies are facing.

Bitcoin Over $1,000; Where Now?

In the past 48 hours, the price of Bitcoin kept rising, just like discussed, with a minor burst of volatility that was noted today. Its lowest point was on Thursday when it dropped down to $973.21, while the highest peak was reached today when the price went up to $1012.80, followed by a fast $20 plunge that was sustained for less than an hour, before the price reversed.

The price increase coincides with a new wave of interest, as the trading volume is now at $191,555,000, while the market cap is at a record high of $16.6 billion. As always, high volume means higher chances for price corrections.

Our technical analysis shows that the market is heavily pro- buy, with all 12 moving averages and 10 out of 12 technical oscillators sending a buying signal on a 1-hour time frame. The SMA 100 is safely above the SMA 200 on a short frame, hinting at an upward path. However, considering that the NFP report is to be released in a couple of hours, other commercial trading markets might go either way and drag Bitcoin along with it. So, be wary of any changes soon.

Reserve Bank of India Warns Against Bitcoins

Other noteworthy news that this week brought was that the Central Bank of India (RBI) is now warning any users, traders, or keepers of virtual currencies about the prospective legal, financial, operational and security risks that could stem from their use. The Bank also publicly stressed that they haven’t licensed or authorized any company or individual to run Bitcoin (or other virtual currency) “schemes”

Due to the unlicensed operation of any virtual currency exchange or trading platform, the RBI says that any user choosing to deal with virtual currencies in any way is also choosing to accept the risks of doing so. They stress that there is no central bank authorizing the trading and creation of virtual currencies, nor has any registration been obtained by the entities that provide such activities.

It’s interesting to note that this warning comes not long after the Indian Bitcoin market saw a spike in interest, which, in part, was due to the demonetization of 500 and 1,000 Rupee notes by the government as a way to curb black money tax evasion.

What is Bitcoin mining and how you can be a Bitcoin miner

What is Bitcoin mining? Bitcoin mining is how Bitcoin transactions are validated and confirmed by the Bitcoin network.