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 power down the exchanges which cryptocurrencies are traded. As a result, BTCChina, among the 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 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 that 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 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 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’s actually going on? Since China’s ICO ban, other world-leading economies are going for a fresh look into how a cryptocurrency world should/ safetrading may be regulated inside their regions. As opposed to banning ICOs, other countries still recognise the technological benefits of crypto-technology, and are looking into controlling industry without completely stifling the growth of the currencies. The big problem for these economies would be to figure out how to get this done, as the choice nature of the cryptocurrencies don’t allow them to be classified underneath the policies of traditional investment assets.
A few of these countries include Japan, Singapore and the US. These economies seek to establish accounting standards for cryptocurrencies, mainly in order to handle money laundering and fraud, that have been rendered more elusive due to the crypto-technology. Yet, most regulators do recognise that there seems to be no real benefit to totally banning cryptocurrencies due to the economic flows that they carry along. Also, probably because it’s practically impossible to power down the crypto-world for so long as the net exists. Regulators can only just give attention to areas where they might have the ability to exercise some control, which seems to be where cryptocurrencies meet fiat currencies (i.e. the cryptocurrency exchanges).
While cryptocurrencies seem ahead 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 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 the amount 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, since the ban will probably increase the demand for cryptocurrency-related GPUs. With the ban, the only method to acquire cryptocurrencies mined with GPUs would be to mine them with computing power. Therefore, individuals looking to acquire cryptocurrencies in China now have to acquire more computing power, rather than making straight purchases via exchanges. Essentially, Nvidia’s sentiments is that isn’t a downhill spiral for cryptocurrencies; in fact, other industries will get a boost as well.