Cryptocurrency’ Rugged Way: China’s ICO Bar
In the wake of China’s ICO ban, what befalls the entire world of cryptocurrencies?
The biggest event in the cryptocurrency world recently was the declaration of the Chinese authorities to turn off the exchanges where cryptocurrencies are traded. Consequently, 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 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 cure 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 planning to work” and so it “is just a fraud… worse than tulip bulbs (in mention of the Dutch ‘tulip mania’ of the 17th century, recognised while the world’s first speculative bubble)… that may blow up” ;.He would go to 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 China’s ICO ban, other world-leading economies are going for a fresh explore the way the cryptocurrency world should/ could be regulated within their regions. Rather than banning ICOs, other countries still recognise the technological great things about crypto-technology, and are considering controlling industry without completely stifling the growth of the currencies. The serious problem for these economies is always to figure out how to get this done, as the alternative nature of the cryptocurrencies don’t allow them to be classified beneath the policies of traditional investment assets.
Many of these countries include Japan, Singapore and the US. These economies seek to establish accounting standards for cryptocurrencies, mainly to be able to handle money laundering and fraud, which were rendered more elusive because of the crypto-technology. Yet, most regulators do recognise that there seems to be no real benefit to fully banning cryptocurrencies because of the economic flows which they carry along. Also, probably because it is practically impossible to turn off the crypto-world for provided that the web exists. Regulators can just only focus on areas where they could manage to exercise some control, which seems to be where cryptocurrencies meet fiat currencies (i.e. the cryptocurrency exchanges).
While cryptocurrencies seem in the CashTab XEC 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, 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 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 is only going to fuel their GPU sales, while the ban will likely increase the demand for cryptocurrency-related GPUs. With the ban, the only method to obtain cryptocurrencies mined with GPUs is always to mine them with computing power. As a result, individuals looking to obtain cryptocurrencies in China now have to obtain more computing power, rather than making straight purchases via exchanges. In essence, Nvidia’s sentiments is this isn’t a downhill spiral for cryptocurrencies; in fact, other industries will receive a boost as well.