Did Chinese Rumors Crash the Bitcoin Price? How Accurate Are They?
Bitcoin’s recent bull run ended with a thud on 3rd November, reaching above $740 before crashing to around $685 in just a few hours. Was a rumor of further Chinese restrictions on Bitcoin exchanges to blame? And if so, how accurate is the news?
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Chinese Rumors Start to Spread… Again
Dramatic financial news site ZeroHedge reported on 3rd November that Chinese regulators ‘are considering policies including restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation and imposing quotas on the amount of bitcoins that can be sent abroad.’
While speculators have often wondered about Bitcoin’s effect on capital flight from China, others doubt it has any impact at all. BTC price movements in the past have appeared to correlate with Chinese monetary policy announcements.
ZeroHedge cited ‘Bloomberg sources’ as the story’s origin, though provided no link. On Reddit, readers were skepticalgiven recent positive signs such as last weekend’s First World Blockchain Conference in Changsha. Several high-level political officials attended the conference, which was organized in part by China’s Ministry of Industry and Information Technology (MIIT).
By press time, the BTC price had rebounded substantially back to $702, though not back to its previous highs.
This post was published at Bitcoinist on 2016/11/04.