In the wake of China’s ICO ban, what befalls the entire world of cryptocurrencies?
The greatest event in the cryptocurrency world recently was the declaration of the Chinese authorities to shut down the exchanges where cryptocurrencies are traded. As a result, BTCChina, one of the largest bitcoin exchanges in China, said so it would be ceasing trading activities by the end 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, 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 likely 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 because 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 is actually going on? Since CashTab XEC China’s ICO ban, other world-leading economies are taking a fresh look into the way the cryptocurrency world should/ could be regulated inside their regions. Rather than banning ICOs, other countries still recognise the technological great things about crypto-technology, and are considering controlling the market without completely stifling the growth of the currencies. The major problem for these economies would be to figure out how to get this done, as the alternative 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 establish accounting standards for cryptocurrencies, mainly in order to handle money laundering and fraud, which have been rendered more elusive due to the crypto-technology. Yet, most regulators do recognise that there appears to be no real benefit to fully banning cryptocurrencies due to the economic flows they carry along. Also, probably because it is practically impossible to shut down the crypto-world for provided that the web exists. Regulators can only just give attention to areas where they could have the ability to exercise some control, which appears to be where cryptocurrencies meet fiat currencies (i.e. the cryptocurrency exchanges).
While cryptocurrencies seem in the future under more scrutiny as time progresses, such events do benefit some countries like Hong Kong. Since 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 organization received “a large 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 this ICO ban will simply fuel their GPU sales, because the ban will likely increase the demand for cryptocurrency-related GPUs. With the ban, the only path to obtain cryptocurrencies mined with GPUs would be to mine them with computing power. As such, individuals looking to obtain cryptocurrencies in China will have to obtain more computing power, as opposed to making straight purchases via exchanges. Basically, Nvidia’s sentiments is this isn’t a downhill spiral for cryptocurrencies; actually, other industries will get a boost as well.