In the wake of China’s ICO ban, what befalls the entire world of cryptocurrencies?
The biggest event in the cryptocurrency world recently was the declaration of the Chinese authorities to turn off the exchanges on which cryptocurrencies are traded. Consequently, BTCChina, one of many largest bitcoin exchanges in China, said that it would 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, crypto news some analysts predict that it can cryptocurrencies can get over the recent falls. Josh Mahoney, a market analyst at IG comments that cryptocurrencies’ “past experience tells us that [they] will probably brush these latest challenges aside” ;.
However, these sentiments don’t come without opposition. Mr Dimon, CEO of JPMorgan Chase, remarked that bitcoin “isn’t planning to work” and that it “is a fraud… worse than tulip bulbs (in mention of the the Dutch ‘tulip mania’ of the 17th century, recognised as the world’s first speculative bubble)… that may blow up” ;.He would go to the extent of saying he would fire employees who were stupid enough to trade in bitcoin.
Speculation aside, what’s actually going on? Since China’s ICO ban, other world-leading economies are going for a fresh explore the way the cryptocurrency world should/ may be regulated within their regions. As opposed to banning ICOs, other countries still recognise the technological benefits of crypto-technology, and are looking into controlling the marketplace without completely stifling the growth of the currencies. The big issue for these economies is always to figure out how to achieve this, as the alternative nature of the cryptocurrencies don’t allow them to be classified underneath the policies of traditional investment assets.
Some of these countries include Japan, Singapore and the US. These economies seek to ascertain accounting standards for cryptocurrencies, mainly in order to handle money laundering and fraud, that have been rendered more elusive because of the crypto-technology. Yet, most regulators do recognise that there appears to be no real benefit to completely banning cryptocurrencies because of the economic flows that they carry along. Also, probably because it’s practically impossible to turn off the crypto-world for provided that the net exists. Regulators can only concentrate on areas where they could manage to exercise some control, which appears to be where cryptocurrencies meet fiat currencies (i.e. the cryptocurrency exchanges).
While cryptocurrencies seem to come under more scrutiny as time progresses, such events do benefit some countries like Hong Kong. Considering that the Chinese ICO ban, many founders of cryptocurrency projects have been driven from the mainland to the city. Aurelian Menant, CEO of Gatecoin, said that the company received “a high number of inquiries from blockchain project founders based in the mainland” and that there’s been an observable surge in the number of Chinese clients registering on the platform.
Looking slightly further, companies like Nvidia have expressed positivity from the event. They claim that ICO ban will only fuel their GPU sales, as the ban will probably boost the demand for cryptocurrency-related GPUs. With the ban, the only path to obtain cryptocurrencies mined with GPUs is always to mine them with computing power. Therefore, individuals looking to obtain cryptocurrencies in China are in possession of to obtain more computing power, instead of making straight purchases via exchanges. Basically, Nvidia’s sentiments is that isn’t a downhill spiral for cryptocurrencies; actually, other industries will get a boost as well.