Cryptocurrency’ Rugged Street: China’s ICO Prohibit
In the wake of China’s ICO ban, what befalls the planet of cryptocurrencies?
The greatest event in the cryptocurrency world recently was the declaration of the Chinese authorities to turn off 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 conclusion 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 which 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 get over the recent falls. Josh Mahoney, a market analyst at IG comments that cryptocurrencies’ “past experience tells us that [they] will more than likely brush these latest challenges aside” ;.
However, these sentiments don’t come without opposition. Mr Dimon, CEO of JPMorgan Chase, CashTab XEC remarked that bitcoin “isn’t planning to work” and so it “is just a fraud… worse than tulip bulbs (in reference to the Dutch ‘tulip mania’ of the 17th century, recognised since the world’s first speculative bubble)… which will blow up” ;.He goes to the extent of saying that he would fire employees have been stupid enough to trade in bitcoin.
Speculation aside, what’s actually going on? Since China’s ICO ban, other world-leading economies are taking a fresh explore the way the cryptocurrency world should/ may be regulated within their regions. As opposed to banning ICOs, other countries still recognise the technological advantages of crypto-technology, and are looking into controlling industry without completely stifling the growth of the currencies. The big issue for these economies is always to figure out how to do this, as the choice nature of the cryptocurrencies do not allow them to be classified beneath 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 is apparently no real benefit to fully banning cryptocurrencies due to the economic flows which they carry along. Also, probably because it is practically impossible to turn off the crypto-world for provided that the net exists. Regulators can only just give attention to areas where they could be able to exercise some control, which is apparently 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. Because 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 high number of inquiries from blockchain project founders located in the mainland” and that there has 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 is only going to fuel their GPU sales, since the ban will more than likely boost the demand for cryptocurrency-related GPUs. With the ban, the only way to obtain cryptocurrencies mined with GPUs is always to mine them with computing power. Therefore, individuals looking to obtain cryptocurrencies in China will have to obtain more computing power, instead of making straight purchases via exchanges. Basically, Nvidia’s sentiments is this isn’t a downhill spiral for cryptocurrencies; in reality, other industries will be given a boost as well.