The cryptocurrencies have been back in the news recently, in light of Bitcoins astronomic resurgence. Although it would be naive to believe that any one thing can be the driver behind the 150% increase over the past few months, significant parallels however can be drawn with what has been going on in China.
Now, I don't want to bore you, but for those who don't know; Chinese nationals can 'only' transfer out of the country the equivalent of $50,00 per year. With China's economy in somewhat of a downward spiral the government are increasingly keen to keep as much money as possible within its economy rather than it being held, invested or spent outside of China.
There have been a number of high profile attempts to try and circumvent the restriction, which have had varying degrees of success. The abuse of China UnionPay is the one currently under the Ministry of Public Security’s microscope. Via the use of Union cards in Macau; the former Portuguese enclave has become a hotbed for the use of unregulated POS (Point Of Sale) systems. Chinese nationals can use these vendors to ‘purchase an item’ but in reality receive cash as a result of the transaction. My point is that with these capital controls gaining momentum, a parallel can be drawn with the increase in the price of Bitcoin.
As a side note - expect Macau based casino revenues to be detrimentally affected, compounded by other measure being taken by Beijing to restrict the decadence of high profile officials on the island. (
WYNMY
& Galaxy are two Macau based casino behemoths if you’re interested in that side of things).
I am ultimately quite bearish in the short-term with the cryptocurrency having already failed to break the November 2014 highs with my target being the 0.5 fib level (circa $360) with 0.618 fib level ($310) presenting a favourable buy opportunity.
It's pointless me regurgitating articles so I have put a link to it below (South China Morning Post). I have also put links to a few more articles that I found both useful and interesting when putting this analysis together.
Sources:
Bloomberg:
www.bloomberg.com/ne...rd-1-9-amid-slowdown
Deutsche Welle:
www.dw.com/en/china-...l-outflow/a-18705407
South China Morning Post:
www.scmp.com/news/ho...ts-tough-abuse-china
Now, I don't want to bore you, but for those who don't know; Chinese nationals can 'only' transfer out of the country the equivalent of $50,00 per year. With China's economy in somewhat of a downward spiral the government are increasingly keen to keep as much money as possible within its economy rather than it being held, invested or spent outside of China.
There have been a number of high profile attempts to try and circumvent the restriction, which have had varying degrees of success. The abuse of China UnionPay is the one currently under the Ministry of Public Security’s microscope. Via the use of Union cards in Macau; the former Portuguese enclave has become a hotbed for the use of unregulated POS (Point Of Sale) systems. Chinese nationals can use these vendors to ‘purchase an item’ but in reality receive cash as a result of the transaction. My point is that with these capital controls gaining momentum, a parallel can be drawn with the increase in the price of Bitcoin.
As a side note - expect Macau based casino revenues to be detrimentally affected, compounded by other measure being taken by Beijing to restrict the decadence of high profile officials on the island. (
WYNMY
& Galaxy are two Macau based casino behemoths if you’re interested in that side of things). I am ultimately quite bearish in the short-term with the cryptocurrency having already failed to break the November 2014 highs with my target being the 0.5 fib level (circa $360) with 0.618 fib level ($310) presenting a favourable buy opportunity.
It's pointless me regurgitating articles so I have put a link to it below (South China Morning Post). I have also put links to a few more articles that I found both useful and interesting when putting this analysis together.
Sources:
Bloomberg:
www.bloomberg.com/ne...rd-1-9-amid-slowdown
Deutsche Welle:
www.dw.com/en/china-...l-outflow/a-18705407
South China Morning Post:
www.scmp.com/news/ho...ts-tough-abuse-china