In the wake of China’s ICO ban, what befalls the planet of cryptocurrencies?
The biggest event in the cryptocurrency world recently was the declaration of the Chinese authorities to turn off the exchanges which cryptocurrencies are traded. Consequently, BTCChina, one of many largest bitcoin exchanges in China, said that it will be ceasing trading activities by the end of September. This news catalysed a sharp sell-off that left bitcoin (and other currencies such as 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 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, CashTab CEO of JPMorgan Chase, remarked that bitcoin “isn’t going 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 because the world’s first speculative bubble)… that may blow up” ;.He visits the extent of saying he would fire employees who 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 going for a fresh look into how the cryptocurrency world should/ can 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 industry without completely stifling the growth of the currencies. The major problem for these economies is to figure out how to get this done, as the choice nature of the cryptocurrencies do not allow them to be classified beneath 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, which were rendered more elusive due to the crypto-technology. Yet, most regulators do recognise that there seems to be no real benefit to fully 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 so long as the internet exists. Regulators can only give attention to 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 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 now been driven from the mainland to the city. Aurelian Menant, CEO of Gatecoin, stated that the business received “a large 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 only fuel their GPU sales, because the ban will likely increase the demand for cryptocurrency-related GPUs. With the ban, the only method to obtain cryptocurrencies mined with GPUs is to mine them with computing power. As such, individuals looking to obtain cryptocurrencies in China are in possession of to obtain more computing power, instead of making straight purchases via exchanges. Essentially, Nvidia’s sentiments is this isn’t a downhill spiral for cryptocurrencies; in fact, other industries will receive a boost as well.