zhangweiwu, predicted the start of the chinese bubble before it happened on October 21, 2013 when the price was still sub $200.
false signal resulted rally in China, and it won't stop.
October 21, 2013, 05:29:00 AM
Reply with quote #1
If you search the topic in baidu of the last week's price rise, and you search in Chinese, most posts and reports ascribe it to the recent adoption of bitcoin payment method by a web service of Baidu (jiasule.baidu.com).
For example this report of sina.com (one of the biggest Chinese online news outlet):
http://tech.sina.com.cn/i/2013-10-17/10248825635.shtmlThese reports suggests that the adoption by Baidu is a signal that the big vendors are accepting bitccoin - consider the close tie between baidu and central government, that the government may be interested too. It is like saying Microsoft or Facebook started to accept bitcoin. That tapped on the emotion and BTC rose.
I think the big vendors are no way closer to accepting bitcoin in the last week than any weeks before. It is indeed a small change, and signals nothing from big vendors nor the central government at all.
Chinese information technology vendors, including the big ones, in general prefer the studio model. A big company is devided into multiple studios, some companys have 100 studios. They each compete against each other. They compete on revenue and profit, within the embralla of a same company. Each studio find their own ways of making profit, and enjoy freedom of decision as long as they are making money. The mother company acts like a referee, dismissing unprofitable studios and buying out (admitting) small competitors to form new studios; the mother company also act as a protector, backing the studios with tremendous PR and governmental relationship power in case their competitor choose to fight on a different level (which also happens). This fast-proliferating fast-evoluting style isn't very co-ordinated, but it is effective because in general in China our culture emphasize competition, and we like to compete and win and we work the best if competition is physically next door. If instead big vendors are organized like Microsoft to co-operate and create huge products (Windows 7) in 5-year span, the youngsters wouldn't stay on their edge - they need quick confirmation whether they are wining or not - they work very hard but doesn't have much patience. Skipping between studios is frequent, the fast-growing studios get more resource and people.
The recent acceptance of bitcoin is likely a decision of a single stuidio in the embralla of baidu, perhaps trying to beat other studios of the same company. Baidu HQs speaksman said nothing about bitcoin in the whole year. How Baidu HQs treats the move is unkown, and they probably don't have an attitude, for it (bitcoin) is trivial compare to the huge online information market they are already on. News interview suggests this is a decision of an individual studio: "We always try to satisfy the webmasters, so when they want to pay with bitcoin, we accept them". Notice the interviewee said 'webmasters', that's the customers of this studio, not Baidu in whole, and he speaks for his own studio.
Also take notice the customer of this studio (jiasule.baidu.com), the webmasters, happen to be the major group of bitcoin miners in China.
So why such a small piece of news that indicates nothing for sure, stirs up such a rally? More important than the news itself it says Chinese investors are desperately looking for a reason to rally. They perhaps expected bitcoin to be above 1000¥ for a long time, now they only need a slight upward vibrate to rally. And they have a good reason to hope for a rally, for they bought huge amount of mining equipments in anticipation of raise of bitcoin value.
My reading of the event is, that Chinese investors are anticipating a rally for a long time, thus it won't cool down in just a few days. However they are speculating, not having much faith in sustanibility of bitcoin and may be frighten away by small bad news within China. They are less sensitive to western news like silkroad.
In China we have highly centralized political power. The chance Chinese government allows bitcoin on the markets (when it calls their attention) is like the chance U.S. government raise debt in BTC. The big vendors foresee it and shouldn't be interested. Besides we have a monoplay business atomosphere in China (every player are greedy, wants to win and take all), and you don't monoplay bitcoin. I see no reason Baidu being interested to include bitcoin into their development strategy. Small vendors are much more likely to be interested in btc.
(OP is a Chinese citizen in Beijing)
