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 power down the exchanges where cryptocurrencies are traded. Consequently, BTCChina, one of many largest bitcoin exchanges in China, said that 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. forex trading With bitcoin having increases that surpass quadrupled values from December 2016 to September 2017, some analysts predict that it can cryptocurrencies can get over 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 whilst the world’s first speculative bubble)… that will 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 is actually going on? Since China’s ICO ban, other world-leading economies are taking a fresh look into how a 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 industry without completely stifling the growth of the currencies. The big problem for these economies is always 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.
Some 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 were 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 they carry along. Also, probably because it is practically impossible to power down the crypto-world for so long as the web exists. Regulators can only just give attention to areas where they may manage 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 large number of inquiries from blockchain project founders situated in the mainland” and that there has been an observable surge in how many 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, whilst the ban will probably boost the demand for cryptocurrency-related GPUs. With the ban, the only path to obtain cryptocurrencies mined with GPUs is always 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.