Superforecasting cryptocurrencies: Week 4 Day 4: China syndrome
21 September 2017
China syndrome but no crash
Once again Korean won trading was the most active, followed by US$, and Bitcoin Cash the main victim.
One puzzle is the lack of long-term impact from the "China syndrome" of meltdown on the price of bitcoin itself.
No longer a major hub
Tom Reese on ETF Daily News two days ago gives an explanation from Tyler Durden: "China has long-since lost any standing as a major trading hub in the crypto world."
I haven't flagged the issue before because it fits so closely to an examination of the prices and bitcoin's recovery.
2017 vs 2013
What is interesting is Reese's observation that China's actions against cryptocurrencies in 2013 plunged the market to its depths for three years because "Chinese bitcoin trading accounted for as much as 90% of global volume."
Compare this with the first half of the year:
Sean Williams at Motley Fool reported:
Per Bitcoinity.org, [on 11 September] three Chinese exchanges made up close to half of the global market share of cryptocurrency trading over the previous 30 days
China's dilemma
China faces a dilemma, he points out:
"China’s crackdown is a double edged sword: after all bitcoin was created precisely with the contingency of a government crackdown in mind, and as such should bitcoin prove resilient to Beijing’s actions it will only make it that much more valuable, sending its price even higher. Furthermore, China would be effectively shutting itself out of a growing global market and potentially, lagging in blockchain development."
Excel version
Click here for an Excel 1997-2003 version of this table with records for every day until now, free for download. There's also an Excel version of the shorter summary screenshot used above.
Superforecasting
Indicators
I've listed my seven indicators and explanations of what I consider important here.