In the wake of China’s ICO ban, what befalls the planet of cryptocurrencies?
The largest event in the cryptocurrency world recently was the declaration of the Chinese authorities to shut down the exchanges which cryptocurrencies are traded. As a result, 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 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 more than 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 going to work” and that it “is really a fraud… worse than tulip bulbs (in mention of the Dutch ‘tulip mania’ of the 17th century, recognised whilst the world’s first speculative bubble)… which will blow up” ;.He would go to 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 having a fresh look into how a cryptocurrency world should/ could be regulated in their regions. Rather than banning ICOs, other countries still recognise the technological advantages of crypto-technology, and are looking at controlling the market without completely stifling the growth of the currencies. The serious problem for these economies is to work out how to get this done, as the choice nature of the cryptocurrencies do not 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 ascertain accounting standards for cryptocurrencies, mainly in order to handle money laundering and fraud, which were rendered more elusive as a result of CashTab Ecash crypto-technology. Yet, most regulators do recognise that there seems to be no real benefit to totally banning cryptocurrencies as a result of economic flows they carry along. Also, probably because it’s practically impossible to shut down the crypto-world for as long as the net exists. Regulators can just 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 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 already been driven from the mainland to the city. Aurelian Menant, CEO of Gatecoin, said that the organization received “a high number of inquiries from blockchain project founders located 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 this ICO ban will simply fuel their GPU sales, whilst the ban will more than 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 a result, individuals looking to obtain cryptocurrencies in China will have to obtain more computing power, instead of making straight purchases via exchanges. Basically, Nvidia’s sentiments is that this isn’t a downhill spiral for cryptocurrencies; actually, other industries will get a boost as well.