From the Google translation of the original source:
"However, Bitcoin transaction as a commodity trading behavior on the Internet, ordinary people have the freedom to participate in the premise own risk."
The new bitcoin policy here isn't that much more conservative than the USA's bitcoin policy, and Beijing just legalized bitcoin for ordinary citizen gamblers, speculators, savers, and options traders! This is a good sign for bitcoin, and the market is reacting negatively anyways, probably encouraged by whales selling off trying to hit stop loss orders.
As the Chinese social-mediasphere dissects this announcement over the next day, the price should recover. Great buying opportunity right now for the short term, even if you're not long on bitcoin.
I don't see how it's a "good sign for Bitcoin". Until now people thought Bitcoin is going to explode in China, but now China put some serious restrictions on it. Why would that be a good sign?
Also, what happens if exchanges won't be allowed to have a bank account with the banks either? That's always been one of the biggest fears regarding Bitcoin - that if the governments decided to go after Bitcoin, that may not kill Bitcoin, but it would seriously slow down its growth and liquidity if they made it illegal for exchange companies to exchange Bitcoin.
The restrictions appear to be placed on banks and other financial institutions creating any bitcoin related instruments (ETFs, etc.) or dealing directly with bitcoin (eg. exchange RMB for BTC or the reverse). Also, it would essentially prevent a bank using it's reserve for a bitcoin investment.
Exchanges can still operate as exchanges and can continue to have bank accounts as long as said banks do not deal themselves in bitcoins.
Individuals and businesses are free to use bitcoin. This is actually very good news. The government was silent all this while and though they haven't said "Bitcoin is the new reserve currency", the Chinese stance is essentially the exact same stance that the US Senate took last month. I'm sure US banks also cannot deal with something that isn't a 'valid currency'.
Restrictions like these were always going to happen. Whether they take them further like you've said is the big question. For now, it's going to continue to grow, short term at least.
I think it's a bad sign for the Chinese, not the bitcoin. If the central bank doesn't regulate it's trade, they're slowing down the time it takes for Chinese to trade compared to other countries.
It just means only private wealthy companies can facilitate the trades -- which is dangerous in itself. By opting out of controlling bitcoin transactions, I think the Republic of China is in some ways harming its only citizens. People will trade btc whether the banks support it or not, the chinese gov can help regulate this, but if they choose not to, they're hurting their own citizens.
The CCP pervasively makes decisions that can harm its people. I didn't realize people were seriously considering the idea that the PRC was going to offer a national trade in bitcoin.
That is actually not only true for goldbugs, but for all financial bubbles. If you had asked someone about AAPL in summer of 2012, they would have told you that any specific news item was bullish. If you had asked someone about crude oil in 2008, they would have told you that any specific news would drive the price higher. It is the same pattern over and over gain. Once the goldbugs throw in the towel and admit that they were wrong, it will be a good time to actually buy gold.
Yes, you're right, this applies equally well to the dotcom bubble, housing markets or any other bubble. Disconnects between value and price can happen in any market, and they're very hard to recognise, though if you find yourself rationalising incredibly bad news like this as having an upside or being a buying opportunity, and dismissing falls/rises of 20% in hours as normal, or claiming that an asset is inevitably going to rise in value, you're probably in a bubble.
I can't even see a clear lower-bound on the value of bitcoin as there is with say housing (rental value) or oil (use value), though it does compare well to shares - it could easily go to zero in the long term and is likely to fluctuate wildly based on sentiment in the meantime.
Interesting look at the lower bound that got a lot of bitcoiners angry. The comments are actually pretty good as the initial author did miss some of the finer points on bitcoin to which he responds in the comments.
They are linked at the hip in many ways. Bitcoin is a speculative asset, but it is also a really well thought out accounting ledger and transaction protocol for that asset. Plus m-of-n transactions, watermarking, etc... lot's of cools stuff.
When people talk about the speculative nature, they tend to sound like Glenn Beck. When they talk about the technology, they sound more like techno-futurists. I like now that economists other than Austrians are getting into analyzing the possibilities. It isn't what the worst bitbugs want to hear (bitcoin taking over all currency and forcing global financial institutions to crumble), it is more contemplating how bitcoin fits into the complex monetary, financial, fiscal, etc world that already exists.
Any publicity is good publicity. Applies to emerging markets as well, maybe especially since they require awareness which can be hard to gain without public discourse.
"However, Bitcoin transaction as a commodity trading behavior on the Internet, ordinary people have the freedom to participate in the premise own risk."
The new bitcoin policy here isn't that much more conservative than the USA's bitcoin policy, and Beijing just legalized bitcoin for ordinary citizen gamblers, speculators, savers, and options traders! This is a good sign for bitcoin, and the market is reacting negatively anyways, probably encouraged by whales selling off trying to hit stop loss orders.
As the Chinese social-mediasphere dissects this announcement over the next day, the price should recover. Great buying opportunity right now for the short term, even if you're not long on bitcoin.