Bitcoin plunges as much as 20 percent as Chinese yuan soars | Hacker News Reader

Bitcoin plunges as much as 20 percent as Chinese yuan soars

reuters.com

39 pointsartsandsci22 comments

I think all financial journalists should be required to trade real money for a year.

Then we'll stop seeing these bullshit causations.

Bitcoin's today drop was nothing else than a normal reaction after the incredible recent runup.

If gold surged today instead of the yuan, the article would have stated that gold was the reason.

I remember a day during the hectic days of the 2008 meltdown, when in a single day DOW dropped 5%, but ended 5% up (thus a 10% swing). In that day I've seen two articles in the same source, with titles like this "Dow plunges on Fed decision", later "Dow surges on (same) Fed decision", instead of a more realistic "the market is crazy because everybody is scared shitless"

AIUI there's been a lot of speculation lately that the price of bitcoin was propped up by Chinese investors, so if bitcoin drops 20% at the same time that the Chinese yuan soars, I don't think it's much of a leap to speculate that the former was caused by the latter.

I have a question for you. Have you ever traded? This is not meant as an insult.

Just for scale, yuan soared 1% today, bitcoin dropped 20%. Yes, I know there is leverage in the forex markets. But more importantly, compared to the yuan market, bitcoin is a spit in the bucket ($300 bln yuan daily volume vs whatever the bitcoin daily volume is)

What you're (or the article) is basically saying is that the investors which were into bitcoin wet themselves today by the amazing yuan soar and suddenly decided to move theirs money from bitcoin to the yuan, even if these two are completely different financial things (even if both are named currencies), and one who invests into bitcoin does so for completely different reasons than one investing into the yuan.

The other option is that the price of bitcoin is largely propped up by Chinese investors evading capital controls or using it trade yuan for other currencies at non-official rates. If bitcoin is largely driven by avoiding government controls changes around it could have big effects.

Which reminds me: the market is the real-time chart of humanity's hopes and fears.

Quite fascinating, really.

Humanity's?

Don't you mean the global 1%?

Well, I meant "investors'" but humanity sounded so much better ;)

And of course participants in the market do get influenced by outside events.

Do you have a 401k?

Yes.

You and I are part of the global 1%.

http://www.investopedia.com/articles/personal-finance/050615...

"According to the Global Rich List, a website that brings awareness to worldwide income disparities, an income of $32,400 a year will allow you to make the cut. Using current exchange rates, that amounts to roughly:

    29,185 euros
    2.2 million Indian rupees, or
    211,126 Chinese yuan

So if you’re an accountant, a registered nurse or even an elementary school teacher, congratulations. The average wage for any of these careers falls well within the top 1% worldwide."

it cant be that hard to write the "Dow volatility increases on Fed decision" article

A lot of financial articles like that are actually written by bots now.

Deleted comment

Yes, I have several years of forex trading experience, and for a couple of years trading was my only source of income.

I also made more money than a programmer annual salary trading bitcoin, by using exactly these kind of logic (behavioural/sentiment analysis)

There was one (1) trade at $881. At time of typing, BTC is above $1000 again, meaning it's back to the value it had in the dim antiquity of Jan 3rd, 2017.

https://bitcoinwisdom.com/markets/coinbase/btcusd

When you start seeing posts from people who aren't into cryptocurrencies talking about buying bitcoin, that's when you sell bitcoin.

Yea, but I saw that years ago.

This large change based on another currency may paint a dark picture in its future as a stable cryptocurrency

Actually, as Bitcoin's value and "market cap" has increased it has become more stable. The current fluctuations are small compared to what used to happen. If the value continues to go up (it is still up 30% over 30 days), stability is likely to increase as well. If not, it won't.

I'd also like to point out that "real" currencies experience large fluctuations sometimes too, despite their much larger "market cap". The pound, the Swiss franc, and the ruble have all seen large fluctuations in recent years. And of course there have been many cases of hyperinflation in the past and we have a current one in Venezuela.

There's been a bit of an unusual spike of about 30% in the last couple of weeks due to a sudden influx of Chinese investors. Now it's returning to something closer to its normal value.

What a stable store of value!

No, you shouldn't put your lifesavings in it, but as others have pointed out, the Dow has gone down %5 and up %5 in the same day.

Down another 10% today, stable as ever!

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