In the wake of China’s ICO ban, what befalls the entire world of cryptocurrencies?
The greatest event in the cryptocurrency world recently was the declaration of the Chinese authorities to turn off the exchanges where cryptocurrencies are traded. CashTab Ecash Consequently, BTCChina, among the largest bitcoin exchanges in China, said that it could be ceasing trading activities by the finish of September. This news catalysed a sharp sell-off that left bitcoin (and other currencies such as for instance Etherium) plummeting approximately 30% below the record highs that were reached earlier this month.
So, the cryptocurrency rollercoaster continues. With bitcoin having increases that surpass quadrupled values from December 2016 to September 2017, some analysts predict that it can cryptocurrencies can cure the recent falls. Josh Mahoney, a market analyst at IG comments that cryptocurrencies’ “past experience tells us that [they] will likely brush these latest challenges aside” ;.
However, these sentiments don’t come without opposition. Mr Dimon, CEO of JPMorgan Chase, remarked that bitcoin “isn’t likely to work” and that it “is really a fraud… worse than tulip bulbs (in reference to the Dutch ‘tulip mania’ of the 17th century, recognised since the world’s first speculative bubble)… that may blow up” ;.He would go to the extent of saying that he would fire employees have been stupid enough to trade in bitcoin.
Speculation aside, what is actually going on? Since China’s ICO ban, other world-leading economies are taking a fresh consider how a cryptocurrency world should/ can be regulated within their regions. Rather than banning ICOs, other countries still recognise the technological benefits of crypto-technology, and are looking at controlling the marketplace without completely stifling the growth of the currencies. The big problem for these economies is to figure out how to get this done, as the alternative nature of the cryptocurrencies do not allow them to be classified under the policies of traditional investment assets.
Several of those countries include Japan, Singapore and the US. These economies seek to establish accounting standards for cryptocurrencies, mainly to be able to handle money laundering and fraud, which have been rendered more elusive due to the crypto-technology. Yet, most regulators do recognise that there seems to be no real benefit to completely banning cryptocurrencies due to the economic flows that they carry along. Also, probably because it is practically impossible to turn off the crypto-world for as long as the net exists. Regulators can only concentrate on areas where they could be able to exercise some control, which seems to be where cryptocurrencies meet fiat currencies (i.e. the cryptocurrency exchanges).
While cryptocurrencies seem in the future under more scrutiny as time progresses, such events do benefit some countries like Hong Kong. Because the Chinese ICO ban, many founders of cryptocurrency projects have already been driven from the mainland to the city. Aurelian Menant, CEO of Gatecoin, said that the organization received “a large number of inquiries from blockchain project founders situated in the mainland” and that there has been an observable surge in how many Chinese clients registering on the platform.
Looking slightly further, companies like Nvidia have expressed positivity from the event. They claim this ICO ban is only going to fuel their GPU sales, since the ban will likely boost the demand for cryptocurrency-related GPUs. With the ban, the only path to acquire cryptocurrencies mined with GPUs is to mine them with computing power. As such, individuals looking to acquire cryptocurrencies in China will have to acquire more computing power, as opposed to making straight purchases via exchanges. Basically, Nvidia’s sentiments is this isn’t a downhill spiral for cryptocurrencies; in reality, other industries will get a boost as well.