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 turn off the exchanges on which 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 finish 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 have been 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 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 going to work” and so it “is just a fraud… crypto signals 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 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 the way the cryptocurrency world should/ can be regulated within their regions. As opposed to 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 to figure out how to achieve this, as the alternative nature of the cryptocurrencies do not allow them to be classified underneath the policies of traditional investment assets.
Some 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, that have been rendered more elusive due to the crypto-technology. Yet, most regulators do recognise that there appears to be no real benefit to totally banning cryptocurrencies due to the economic flows that they carry along. Also, probably because it is practically impossible to turn off the crypto-world for as long as the internet exists. Regulators can only just concentrate on areas where they might be able to exercise some control, which appears 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, stated that the organization received “a large 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 that this ICO ban will simply fuel their GPU sales, because the ban will probably raise the demand for cryptocurrency-related GPUs. With the ban, the only path to acquire cryptocurrencies mined with GPUs is to mine them with computing power. As a result, individuals looking to acquire cryptocurrencies in China are in possession of to acquire more computing power, in place of making straight purchases via exchanges. Essentially, Nvidia’s sentiments is that this isn’t a downhill spiral for cryptocurrencies; in reality, other industries will get a boost as well.