In the wake of China’s ICO ban, what befalls the entire world of cryptocurrencies?
The largest event in the cryptocurrency world recently was the declaration of the Chinese authorities to shut down the exchanges on which cryptocurrencies are traded. As a result, BTCChina, one of many largest bitcoin exchanges in China, said so it will be ceasing trading activities by the conclusion of September. This news catalysed a sharp sell-off that left bitcoin (and other currencies such as for example Etherium) plummeting approximately 30% below the record highs which 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 so it can cryptocurrencies can recover from 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 planning to work” and so it “is just a fraud… worse than tulip bulbs (in mention of the the Dutch ‘tulip mania’ of the 17th century, recognised since the world’s first speculative bubble)… that may blow up” ;.He visits the extent of saying that 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 look into how the cryptocurrency world should/ can be regulated in their regions. As opposed to banning ICOs, other countries still recognise the technological benefits of crypto-technology, and are looking into controlling the market without completely stifling the growth of the currencies. The serious problem for these economies is to figure out how to do this, as the alternative nature of the cryptocurrencies don’t 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 determine accounting standards for cryptocurrencies, mainly in order to handle money laundering and fraud, which have been rendered more elusive because of the crypto-technology. CashTab Yet, most regulators do recognise that there seems to be no real benefit to totally banning cryptocurrencies because of the economic flows which they carry along. Also, probably because it’s practically impossible to shut down the crypto-world for so long as the web exists. Regulators can only concentrate on areas where they could have the ability to exercise some control, which seems 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 business received “a high number of inquiries from blockchain project founders located in the mainland” and that there has been an observable surge in the amount of Chinese clients registering on the platform.
Looking slightly further, companies like Nvidia have expressed positivity from the event. They claim this ICO ban will simply fuel their GPU sales, since the ban will likely raise the demand for cryptocurrency-related GPUs. With the ban, the only way to acquire cryptocurrencies mined with GPUs is to mine them with computing power. Therefore, individuals looking to acquire cryptocurrencies in China will have to acquire more computing power, as opposed to making straight purchases via exchanges. In essence, Nvidia’s sentiments is this isn’t a downhill spiral for cryptocurrencies; actually, other industries will be given a boost as well.