Arise China

ThebullishBitcoinnarrativesurrounding China disappeared afterthePBOC neuteredtheleading exchanges.Themost drastic action wasthesuspension ofBitcoinwithdrawals while exchanges’ compliance departments were upgraded. After many months of speculating whenthePBOC would givethenod, it appears thatBitcointrading is normalising. China being China,thePBOC never overtly told exchanges to halt withdrawals. They exerted pressure where it was needed and obtainedthedesired result.Thebig 3 exchanges successfully fluffed their way back in business. OKCoin and BTCC now allow clients to withdraw token amounts ofBitcoineach day. At OKCoin it is 10Bitcoinper day. Clients must pass stringent KYC / AML checks, and pinky swear they aren’t usingBitcointo evade capital controls. XBT/CNY began 2017 at a modest premium to XBT/USD, and after successive PBOC punitive actions it traded at a discount.Thediscount reached a low of 20% earlier this month. A recent Caixin article, which claimedthePBOC would issue exchange fines and clarity as to howBitcoinwould be regulated, injected hope back intothemarket.TheXBTCNY/XBTUSD spread rallied aggressively back to par and aftertherecent withdrawal resumption news,thespread inched to a small premium. Even though many traders wrote China off it still hasthemost number of people withthedesire and means to buyBitcoin.ThePBOC recognised that it couldn’t banBitcoinand thus attempted to stymie its growth through various actions.Bitcoinin 2017 is more widely held than in 2013. Punters in Japan and Korea tookthe“must haveBitcoinat any price” baton from China. Even Americans, evidenced by impressive new Coinbase account signups, are chomping atthe“bit” to enterthedigital industry. This new demand allowedthemarket to ignorethePBOC attempts to controltheprice.Thenormalisation ofBitcointrading in China will serve as another source of dry powder to fueltherally onwards and upwards. $3,000Bitcoinis definitely attainable by month’s end withtherenewed Chinese buying power. ExpectBitcointo push through $2,800 by early next week as traders feel morebullishnow that China has their backs.