Clem Chambers does not hesitate to share his enthusiasm for the potential of crypto to revolutionize the world of finances. In a recent interview with Kitco News, the famous investor and author of Amazon Best-Seller “101 Ways to Pick Stock Market Winners” said that because of its characteristics, Bitcoin (BTC) is superior to gold and even traditional money.
Chambers — who also wrote “Trading Cryptocurrencies: A Beginner’s Guide – Bitcoin, Ethereum, Litecoin” — explained that Bitcoin is on a bullish streak that has been fueled by the trade war between China and the United States:
“As far as I’m concerned it’s the trade war with China… The Chinese have always been big Bitcoin people and I think they’re afraid that the Renminbi, Yuan or whatever you want to call their own currency is gonna get, you know, knocked down .
“I think there’s a rush to buy a Bitcoin in China” he said, noting that one of the reasons could be its convenience to put large ammounts of money out of the country
Chambers also asserted that in addition to the commercial war against China, U.S. threats to bomb the Syrian people and declare a military conflict have also strongly stimulated a massive purchase of cryptocurrencies:
“There’s also a lot of interest in Iran at the moment because obviously, America might be dropping its bombs on the unfriendly guys over there and I think that’s also driving quite a lot of Bitcoin purchasing”
Clem Chambers does not believe that institutions are playing an important role in pricing Bitcoin (and the crypto market in general.) From his point of view, institutions are “years away from really engaging” and simply view cryptocurrencies as a “weird thing” considered by many as “magic money”.
He explained that the market for crypto has a lot of potentials to grow. Chambers made an analogy with Apple, explaining that although crypto users show a strong enthusiasm for this technology, its value is still much lower than it should be:
“It’s aggressive to say that the whole of the crypto space is equivalent to one stock like Disney so it’s a tiny tiny tiny market but it has a massive a massive amount of interest particularly amongst the so-called Millennials and particularly amongst people out in Asia”
Mr. Chambers believes Bitcoin outperforms gold in convenience and security, however from his point of view, BTC is a better form of money than a simple storage of value.
Clem Chambers concluded the interview explaining that the market is so young it turned out to be a gift for experienced traders as it is very easy to predict, but for novice traders, high volatility makes trading a dangerous practice. However, he called on his followers to investigate deeply before trading and not rely on luck:
“If you go in there and you treat Bitcoin like a casino, it will treat you like a gambler and you’ll probably lose your investment,”
The trade war is going from bad to worse and contrarian
investors will have noticed that that is usually good news for bitcoin.
Currently trading at $8,793, up 2.73% in the past 24 hours according to coinmarketcap, the drop below $8,200 witnessed earlier in the week seems a distant memory.
Keeping abreast of the bitcoin market right now, means watching like a hawk the dollar-yuan exchange rate.
That’s an opinion shared by Arthur Hayes, the chief executive of BitMEX exchange – although registered in the Seychelles BitMEX’s operations are based in Hong Kong, so you could say they have their fingers on the pulse.
As the Monday Asia trading session nears, against the backdrop of a deteriorating trade situation and global equity futures flashing red at the time of writing, the price of bitcoin could soon surge above $9,000, for the second time of asking in the past week.
China’s white paper warning to US
China has just released its promised white paper on laying out its stance on the trade dispute it is embroiled in, and squarely blames the US for the breakdown in negotiations, saying the country is “untrustworthy”.
Many governments around the world will probably be in agreement somewhat in the light of the Mexico tariff surprise Trump pulled late last week, that China may have a point. Even if they don’t, the country remains the preeminent workshop of the tech world, so from Asia to Europe tech and other companies are taking a more cautious and pragmatic approach than that shown by the US.
China’s white paper declared that the trade war has not “made
America great again”, as the temperature rises between the two erstwhile
The white paper’s description of the last round of talks
does nothing to engender confidence in any imminent return to the negotiating
table. It charges the US with “intimidation and coercion”, of making “exorbitant
demands” and making “mandatory requirements concerning China’s sovereign affairs”.
Speaking at a press conference on the white paper China’s vice
commerce minister Wang Shouwen said the US was “solely to blame” for the trade
Yesterday saw the latest round of tariffs come into force on both sides.
Late last week China said it was drawing up a list of foreign companies it considers to be “unreliable entities”.
China has also been dropping big hints that it might limit supplies of rare earth metals reaching the US. China mines and processes 80% of the world supply of the metals, which are key to making components for electronic equipment in civilian and military spheres.
FedEX and Micron in the eye of the storm
In a further sign of the widening distance between the two
countries, Wang said “nothing is agreed until everything is agreed”, breaking
off to speak in English as if to stress the lack of progress.
Before a deal could be struck the US would have to “work
towards cancelling them [tariffs]” said Wang, and there’s no indication that’s
going to happen any time soon.
A deal looks even further away now that US express delivery
firm FedEx is being investigated regarding whether it “violated the legitimate
rights and interests of its Chinese clients” according to the Global Times, one
of the most stridently nationalist of the official media.
FedEx, according to CNBC, has admitted to rerouting mail being
sent from Japan to China to the US, making the parcel delivery firm a prime
candidate for early inclusion on China’s list.
It’s not the only US firm in trouble either.
US chipmaker Micron has found itself the subject of an
investigation by the Chinese anti-trust regulators. That follows complaints the
Texas-based company made about intellectual property theft by a Chinese
For its part, the US, via the Pentagon has just accused China
of practicing “predatory economics”.
Watch Trump’s Twitter feeds and the USD/Yuan rate for next crypto market moves
In addition to Trump’s twitter feed, crypto investors need
to keep a watching brief on the yuan dollar exchange rate.
They key level is 7.00. If the yuan rises above that, it
will be the first time it has done so since 2008, and we all know what happened
in that momentous year.
The last time China let the currency depreciate (2014-2015)
it triggered capital flight as yuan-denominated assets fell in value.
But the value of the currency is not even necessarily the
main driver of outflows. Ultimately, asset-rich individuals in China are
looking to diversify their holdings to mitigate risk while at the same time
scouring the world for higher returns in a low interest-rate world. The USD/CYN
rate in this view may merely be the irritant.
Nevertheless, allowing the yuan to depreciate to make exports
cheaper risks opening the floodgates of capital flight as far as the government
is concerned. But logic and what is rational may find themselves put to one
side as the trade war heats up and the temptation to inflict damage on the
trading adversary impairs more considered judgement.
The Trump administration would likely label China a currency
manipulator if it was seen to be deliberately weakening its currency, further
exacerbating the trade conflict by adding a currency war to the mix.
The Chinese government is convinced capital controls is the
answer to capital flight, real and imagined, no matter how ineffective. In the
decade to 2017 outflows of capital from China are estimated at $3.8 trillion.
Today all Chinese citizens are limited to a maximum
conversion of yuan to $50,000. However, even that figure may be too high for
the liking of some officials.
Just last week Yu Yongding, a one-time adviser at the People’s Bank of China, was barred from transferring $20,000 out of the country to relatives residing abroad, the South China Morning Post reported.
If a former adviser to the central bank is having trouble
moving such relatively small amounts of capital that is well within current
rules, then it does suggest that a tightening of foreign exchange policy and
capital controls is taking place.
Bitcoin still in demand despite talk of eliminating mining
There has been scant mention of bitcoin for some time in the
Chinese media most closely aligned with the ruling party, except in the coverage
of clampdowns on miners and cases of crypto-related fraud.
A woman was jailed for four months, the Global Times
reported on 23 May, for stealing 17,277 Kw/h of electricity to mine bitcoin.
China’s powerful economic planning ministry has designated
crypto mining as an industry to be “eliminated”.
The Beijing News reported a day earlier on one hundred individuals who had been defrauded of 7,000 bitcoin in the over-the-counter market, the only type of bitcoin trading that’s still allowed in the country.
Nevertheless, Wei Xiao from the Bank of China Law Association
explicitly stated that owning bitcoin is legal in China, even if exchanges and
initial coin offerings are banned.
Since the 17 April the yuan has fallen against the dollar by
almost 4%, a big move by the standards of the foreign exchange market major
On that date bitcoin was priced at $5,228 and has risen in
value ever since.
Certainly, the network fundamentals and industry
developments are enough to explain the recent uptrend for the word’s best-performing
asset this year, but for near-term accelerant there’s no need to look much
further than China.
Haven asset? Growing numbers think bitcoin is, and that’s what matters
Also, bear in mind the other side of the equation, namely the
growing unease among market participants in the US.
The US is the largest crypto market by some distance and it
is where the anxiety about the impact of loose monetary policy on the fiat
currency is at its highest.
Chances that China will play the US Treasuries card are low
as it would be undermining the value of its $1 trillion hoard of US debt.
Bitcoin is not a haven asset on a par with US government or German debt or gold for that matter, but lots of people think it is – and for others, such as Chinese investors, it is an attractive store of value on offer, either as capital flight conduit or a hedge in itself.
Good news for the Chinese crypto community. Xiao Wei, a Council Member at the Law Research Association of the Bank of China, shared with the local media that, despite the ban, Chinese citizens can safely hold Bitcoins (BTC) without this being considered a crime or an illegal activity.
According to the expert, the Chinese legal system expressly prohibits ICOs, but has a different view regarding the possession of cryptocurrencies and the rights associated with them:
“In 2013, China gave a clear definition of the legal nature of Bitcoin itself: a specific virtual commodity, that is, its status as a “property”. The General Principles of Civil Law, implemented on October 1, 2017, reconfirmed that virtual property is protected by Chinese Law.
Xiao Wei analyzed that based on this, owning Bitcoin is legal in China.”
Likewise, being crypto a legal property, OTC trading is also not considered a crime. The expert explains that according to the laws, this would be an act of “disposition of power” in which one person transfers to another an asset along with the rights associated with it. “How to dispose of it is the private right of the owner, and others have no right to interfere,” he explained
China: The Bitcoin Ban Doesn’t Attack Trading Per Se, But its a Powerful Resource Against Scammers
Xiao’s statements provide some clarity to the ecosystem. The
Chinese government has a restrictive policy that seeks to reduce the activities
associated with cryptocurrencies, especially because of the negative perception
that exists around the ecosystem.
According to BJNews, there are currently 461 court judgments
related to “Bitcoin” and this trend increases over time. In the last
5 years, the evolution was from 9 pieces to 26, then to 54, then 120 and then
However, there is still no need to be overexcited. The
government maintains its ban and there is a very thin line between what is
legal and what is illegal.
According to sources, Xiao Wei has maintained constant communication with other lawyers and there is a general agreement that according to the Country’s Criminal Law, non-p2p trading may fall under the Article 225, numeral 3 of the Criminal Law, “Other illegal business operations that seriously disrupt market order”.
However, although it may be considered legal, there is also
no law that expressly says so. This has generated many conflicting opinions
among legal experts.
One example is Wang Deyi who explains that from his point of view “Bitcoin transactions in China are in violation of national regulatory policies, and bitcoin-based over-the-counter transactions are difficult to obtain legal recognition.”
So far almost all arrests and prosecutions associated with
cryptocurrencies in China have been the result of fraud against third parties.
China has been notoriously harsh on the development of cryptocurrency, imposing a ban on investing and trading into digital assets, including Bitcoin. However, the executive chairman for the Blockchain Research Institute believes that in 20 years, Chinese national fait currency will be replaced by a cryptocurrency version.
Donald Tapscott, speaking in an interview with Bloomberg on April 17, said that the Chinese renminbi (RMB), will likely undergo a transformation into cryptocurrency format, despite the country’s current stance against the industry. Tapscott told Bloomberg of a meeting he had with a vice-chairman in the Communist Party of China, who revealed that President Xi Jinping is bullish on the outlook of blockchain and views it as one of the most important technologies for his country’s development.
China, which has caused a recent stir with rumors that the country will crackdown on cryptocurrency mining–in addition to its current stance towards trading and investing–state that the ban was likely short-lived,
“It’s not really necessary to do that [to ban exchanges and mining] because in 20 years we are not going to be using bitcoin in China. Chinese people will use the RMB, only the RMB will become a cryptocurrency. The central bank of China will turn it into a digital currency.”
Industry analysts have pointed to the development of decentralized exchanges (DEXs) as a way to circumnavigate political influence on cryptocurrency marketplaces. While Tappscott contends that DEXs are one way to operate in China, he reports that the country is adamant on clamping down on all forms of crypto-based investment.
Instead, Tappscott believes that the future of decentralized exchanges is to supersede existing centralized platforms, thanks to what he calls their transparent framework and ability to identify manipulation. Tappscott could see a broader market migration to DEXs, including securities.
Despite having the majority of the world’s largest mining pools based in China, the country is giving indications of a looming crackdown on cryptocurrency mining. Chinese authorities have been discussing the issue, with the National Development and Reform Comission (NDRC) reportedly including mining in a revised list of activities to be shut down. Among a number of issues, the agency finds that cryptocurrency mining wastes resources and pollutes the environment, harping on the point that Bitcoin is not energy efficient.
However, China is also leading the world in the number of blockchain projects under development, despite the government’s stance towards investing in cryptocurrency. Even if digital assets continue to be a point of contention for politicians, the technology of blockchain has garnered serious interest, with 263 blockchain-related projects underway–a full quarter of the global total.
Tappscott’s comments reflect a growing belief that tokenized currencies, supported by blockchain, will be the future for fiat as money turns digital. The renminbi, propelled by China’s massive boost in blockchain development, could make the transition to cryptocurrency even if the government ban continues. Compared to other countries, the Communist Party of China seems primarily concerned with staying ahead of regulatory control over crypto, even if they recognize the value of the underlying technology.
One of the largest data leaks in China’s history has potentially just occurred, with a hacker or group of hackers recently revealing that he/she/they had garnered sensitive data from over 130 million individuals.
As per a report from The Next Web’s Hard Fork column, the hacker recently made a move to sell the aforementioned data for 8 Bitcoin ($56,000) on a China-based dark web portal. According to a post made by the seller, the data was gathered from a security breach of the Huazhu Hotels Group, which is one of China’s most influential local hotel chains, with over 10 individual brands that span across 3,800 hotels in over 380 mainland cities.
Image Courtesy of BleepingComputer.com
Per a report from the Bleeping Computer, the data, which amasses to a reported 141.5 gigabytes in size, is believed to contain 240 million individual records from 130 million guests that have stayed at any number of Huazhu’s establishments in the past. The speculated details of the data leaked are as follows:
Official website registration information (ID card number, mobile phone number, email address, login password); check-in registration information (customer name, ID card number, home address, birthday), and booking information (name, card number, mobile phone number, check-in time, departure time, hotel ID number, room number)
Zibao, a China-based cybersecurity group, speculated that the data was likely leaked when Huazhu programmers or developers uploaded some segments of their firm’s database to Github earlier this month. Since finding out about the hack, the hotel chain has acknowledged this unfortunate occurrence, revealing that some progress has been made in a company-run investigation, but did not give any specifics regarding the case.
Along with facilitating an internal investigation, Huazhu has also sought the help of the Shanghai police, who have come out in solidarity with the accommodation giant in an apparent show of force. A police release noted:
Those who commit illegal acts including theft, trading and exchange of residents’ personal data will be heavily punished. We are resolute in protecting people’s interest and ensuring information security.
While the data leaked may not hold too much value (Ex. lack of credit card info, passport information etc.), it is apparent that local authorities are doing their best to crack down on this illegal occurrence. Following the release of this announcement, the US-listed shares of Huazhu, dubbed China Lodging Group by some, fell by upwards of 4%, but have since recovered.