Bitquant Founder: Bitcoin ‘Useless’ for Dodging China Capital Controls
Amid China’s Bitcoin price reaching all-time highs on BTCC, an industry figure has denounced the currency’s use as a tool against capital controls as useless. In a post earlier today, Bitquant founder Joseph Wang described Bitcoin as “pretty much totally and completely useless for getting money out of China.” Bitquant, a FinTech research laboratory based in Hong Kong, has produced in-depth literature on digital currencies, including a macroeconomic model of Bitcoin. Wang: ‘Nobody interested’ in a Bitcoin capital solution. Despite even mainstream news outlets reporting Chinese investors are....
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The price of bitcoin continues to rise, led primarily by the exchanges in China, which have, oftentimes, been trading at a premium of $10/BTC higher than the other major exchanges around the world. With China driving such an increase in the bitcoin price, many have been speculating that it could be driven by capital controls. In China, the law stipulates that individuals cannot send more than the equivalent of $50,000 out of the country in a year. To get around this, individuals have hired smugglers to get cash out of the country, bought extremely expensive real estate in cities like New....
If you know about bitcoin, then you will be familiar with its ever fluctuating price. Have you ever wondered what causes these price fluctuations? Is it something to be worried about? Also, what does the future hold for bitcoin? It is assumed that the value of bitcoin is directly dependent on its use for transactions. It is believed that an increase in bitcoin transactions increases its value. But a working paper published by Hong Kong based Bitquant Research Laboratories begs to differ. Bitquant is a company involved in R&D supporting high risk/high reward open source financial systems.....
India’s new PM, targeting people who skirt taxes, outlawed 500 and 1,000 rupee bills – a staple in ATMs in the country. He did it in what’s being called a “shock and awe” manner so that black market savers didn’t have enough money to figure something out to do about it. People have stood in line at banks to receive new currency and ATMs, no longer stocked with the larger denominations, are running out of money. The moves will likely lead to an increase in demand for Bitcoin in India. When Beijing issued new capital controls late 2015 to ensure money didn’t leave mainland China, Bitcoin....
It is likely the recent Bitcoin price surge attracted a lot of attention from the Chinese government. There has been a lot of speculation regarding Chinese investors buying Bitcoin to hedge against the declining Yuan. China has always been the driving force behind Bitcoin, as cryptocurrency is largely unregulated in the country. That situation is coming to change, as the country is looking to impose their version of capital controls on Bitcoin. It was only a matter of time until the government started paying close attention to this trading market. However, it remains to be seen how....
The deadly combination of tight capital controls and inflation slowly starve the people’s life savings. Luckily, Bitcoin can help escape from capital destruction. Capital controls are a structure used by governments to restrict, or prevent, the flow of capital out of the country. China, for example, recently tightened regulations on moving money out of the country when faced with a devaluing yuan. Unfortunately, when paired with a penchant for inflating the national currency, capital controls can have a devastating effect on the long-term wealth of the people. The people are forced to use....