I've been thinking about the same thing. Not sure if it's right, but this is what I came to. I think we've got two key drivers:
1. The percent chance the market believes funds will be made wholly available no later than March 15th. (depressive force)
2. The opportunity cost of not having access to one's coins for this span of time. (depressive force)
This first point is one that isn't a factor...until it is. As long as there is faith/trust that things will open on time, this factor will be close to zero. If/once is becomes non-zero, it could grow quickly.
We watched this play out on Gox. While elsewhere coins had a market value of $413, IIRC...we watched the price gap between GoxBux and other coins spread...$20, $30..$50 spread. As fear gripped the market in the final hours, price plummeted to just above $100 - over a 75% discount of 'real' coins.
To the second, this won't affect the long term HODLers. But those looking for the short term profits, I suspect, will become increasingly pressured to sell 'while the price is still good'. Those most afraid this 1000+ price point is temporary will feel increasing pressure to sell out of fear.
In the end, it always comes down to fear and greed.
If internationally, we saw prices diverging, and going up...then I think greed would take over, and risk-tolerant investors would inject cash into the chinese exchanges in order to buy 'cheap coins', knowing they will be inaccessible for up to a month, and knowing they run a risk of not getting what they put in. The extent we see this will be visible by buying volume on exchanges, and would counteract both of the above, depressive forces.
...however, with the ETF decision looming, I don't think we'll see such price divergence, but rather sideways action until the decision.
1. The percent chance the market believes funds will be made wholly available no later than March 15th. (depressive force)
2. The opportunity cost of not having access to one's coins for this span of time. (depressive force)
This first point is one that isn't a factor...until it is. As long as there is faith/trust that things will open on time, this factor will be close to zero. If/once is becomes non-zero, it could grow quickly.
We watched this play out on Gox. While elsewhere coins had a market value of $413, IIRC...we watched the price gap between GoxBux and other coins spread...$20, $30..$50 spread. As fear gripped the market in the final hours, price plummeted to just above $100 - over a 75% discount of 'real' coins.
To the second, this won't affect the long term HODLers. But those looking for the short term profits, I suspect, will become increasingly pressured to sell 'while the price is still good'. Those most afraid this 1000+ price point is temporary will feel increasing pressure to sell out of fear.
In the end, it always comes down to fear and greed.
If internationally, we saw prices diverging, and going up...then I think greed would take over, and risk-tolerant investors would inject cash into the chinese exchanges in order to buy 'cheap coins', knowing they will be inaccessible for up to a month, and knowing they run a risk of not getting what they put in. The extent we see this will be visible by buying volume on exchanges, and would counteract both of the above, depressive forces.
...however, with the ETF decision looming, I don't think we'll see such price divergence, but rather sideways action until the decision.
Good points.
I agree that many people are taking a wait-and-see approach with so much up in the air. Both the ETF decision and the announced end of the withdrawal freezes are almost a month away. I also think we're headed mostly sideways for a few weeks yet.
In the short term, I think we'll continue to see a very gradual creeping upward due to the temporary supply/demand imbalance from the freeze.
The real action starts in March.
Although there is an announced end of the withdrawal freezes, it comes with the caveat that the Chinese exchanges will be using enhanced AML/KYC procedures afterwards. If they adopt draconian AML/KYC procedures a significant percentage of their customers still won't be able to withdraw their Bitcoins because they won't have all the paperwork required to comply with draconian AML/KYC.
That could sustain the supply/demand imbalance after the "end of" the freeze.