In the get up of China’s ICO ban, what befalls the world of cryptocurrencies?
The biggest event in the cryptocurrency world recently was the announcement of the Chinese authorities to banned the deals on which cryptocurrencies are bought btc usd investing and sold. As a result, BTCChina, one of the largest bitcoin deals in China, said that 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 Etherium) in a free fall approximately 30% below the record highs that were reached earlier this month.
So, the cryptocurrency rollercoaster continues. With bitcoin having increases that go beyond quadrupled values from 12 , 2016 to September 2017, some analysts predict that it can cryptocurrencies can cure the recent falls. Josh Mahoney, a market expert 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 going to work” and that it “is a fraud… worse than tulip designs (in mention of the Dutch ‘tulip mania’ of the 17th century, recognized as the world’s first assuming bubble)… that will blow up”. He goes to the extent of saying which he would fire employees who were stupid enough to trade in bitcoin.
Rumours aside, what is actually going on? Since China’s ICO ban, other world-leading economies are taking a fresh look into how the cryptocurrency world should/ can be regulated in their regions. Rather than banning ICOs, other countries still recognise the technological benefits of crypto-technology, and are looking into controlling the market without completely stifling the growth of the currencies. The big issue for these economies is to figure out how to do this, as the alternative nature of the cryptocurrencies do not allow them to be classified under the policies of traditional investment assets.
Some 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 have been delivered 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 banned the crypto-world for as long as the internet exists. Regulators can only focus on areas where they may be able to exercise some control, which seems to be where cryptocurrencies meet fiat currencies (i. e. the cryptocurrency exchanges).
While cryptocurrencies manage to come under more scrutiny as time moves along, such events do benefit some countries like Hong Kong. Since the Chinese ICO ban, many founders of cryptocurrency projects have been driven from the where you live now to the city. Aurelian Menant, CEO of Gatecoin, said that the company received “a high number of inquiries from blockchain project founders situated in the mainland” and that there is an visible tremendous increase in the number of Chinese clients enrolling on the platform.
Looking slightly further, companies like Nvidia have expressed positivity from the event. They claim that this ICO ban will only fuel their GPU sales, as the ban will likely increase the demand for cryptocurrency-related GPUs. With the ban, the only way to obtain cryptocurrencies mined with GPUs is to my very own them with calculating power. Therefore, individuals looking to obtain cryptocurrencies in China will have to obtain more calculating power, as opposed to making straight purchases via deals. In essence, Nvidia’s sentiments is that this isn’t a all downhill spiral for cryptocurrencies; in fact, other industries will acquire boost as well.