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Comment by davidbeep | Hacker News Reader

China not loving bitcoin and not being onboard isn't news. A communist government not agreeing with a decentralized currency shouldn't come as a surprise. Speculators who invest should understand that clearly, and not go into panic when China makes decisions that are very China-like. The good news is that it's a perfect time to buy more bitcoin and ether at a discounted price.

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First of all, China is an authoritarian government, not a communist government. Second of all, China is doing this because they are suffering from [hidden] massive outflow, and need to clamp down on that. The Chinese economy is slowly collapsing from all the malinvestments, and the rich folks are trying to get their money out. Look at the richest man in China, Wang Jianlin, unable to leave China

https://www.bloomberg.com/news/articles/2017-08-28/wanda-bon...

"Wang Jianlin meets Hong Kong’s ex-chief executive Tung, quashing talk he’s barred from travelling"

http://www.scmp.com/business/china-business/article/2110610/...

It has less to do with China's theoretical alignment ("communism") as it does with the challenges to state financial controls, and in turn, China's economic model, that bitcoin poses. Bitcoin is a very useful tool for evading financial and capital controls, which is problematic for an economy with a) rich people trying to cash out and b) a growth model dependent on policies that artificially increase savings rates while minimizing the number of places regular folks can store their wealth.

Basically, China wants artificially high savings rates and for people to keep their cash in state-connected banks, which keeps the supply of money for investment high, because this is baked into their growth model. Bitcoin undermines that.

the high savings rate in China is a myth from 2004. In 2017, people poured all their savings into their kids/other relatives real estate purchases (which itself is a bubble). And the young people have credit card debts and no savings.

Real estate investments are a store of wealth, ie a savings product. Real estate investments are one of the few vehicles to store wealth other than relatively basic accounts that are available to a broad swath of consumers.

Yes, tell that to Greek citizens that were buying houses for 300k and now their value is less than 100k for the same house. Real estate is not a store of wealth, this has been proven many times in the past in several countries. I agree though that the prices on real estate are more stable than any cryptocurrency.

I didn't say they were good stores of wealth. I said people use them as stores of wealth. I making a descriptive claim, and you are making a normative one.

My bad, I understand what you mean

"This is good for bitcoin"

Price goes down? Cheap coins!

Price goes up? To the moon!

A government accepts bitcoins? It's the future!

A government doesn't accept bitcoins? They're scared, it means we're winning!

Price goes down? bitcoin is dead!

Price goes up? e-tulip, don't you see?

A government accepts bitcoins? Fools!

A government doesn't accept bitcoins? Of course! Why should they?

Just a counterpoint, the truth is probably in the middle.

>> The good news is that it's a perfect time to buy more bitcoin and ether at a discounted price.

Why is it discounted? Did their PE drop or what? I mean, why????

Because the price you can pay today is lower than the price someone else happened to pay a few days ago. It's purely psychological.

Most people who claim BTC is discounted now at $3500 probably also believe that BTC is a long-term good "investment", which would imply that they also think it's "discounted" at $5000.

I guess this is obvious to all, but there are no well-understood "fundamentals" yet for BTC.

The most charitable thing you can say is that buying at $3500 now is a better deal than buying at $3500 previously, given it's now been revealed that someone was willing to pay $5000 at one point.

Speculators speculate. Of course they have to use all bad news to make money on shorts, and good news to make money on longs.

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