In the wake of China’s ICO ban, what befalls the entire world of cryptocurrencies?
The largest 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 could 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, safetrading 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 more than 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 so it “is just a fraud… worse than tulip bulbs (in mention of the Dutch ‘tulip mania’ of the 17th century, recognised as the world’s first speculative bubble)… which will blow up” ;.He would go to the extent of saying he would fire employees who were stupid enough to trade in bitcoin.
Speculation aside, what’s actually going on? Since China’s ICO ban, other world-leading economies are having a fresh explore the way the cryptocurrency world should/ may be regulated in their regions. Rather than banning ICOs, other countries still recognise the technological great things about crypto-technology, and are considering controlling the market without completely stifling the growth of the currencies. The big problem for these economies is to work out how to get this done, as the choice nature of the cryptocurrencies don’t 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 ascertain accounting standards for cryptocurrencies, mainly in order to handle money laundering and fraud, which have been rendered more elusive because of the crypto-technology. Yet, most regulators do recognise that there is apparently no real benefit to fully banning cryptocurrencies because of the economic flows that 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 give attention to areas where they could have the ability to exercise some control, which is apparently where cryptocurrencies meet fiat currencies (i.e. the cryptocurrency exchanges).
While cryptocurrencies seem in the future 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 business received “a large number of inquiries from blockchain project founders situated in the mainland” and that there’s 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 that ICO ban is only going to fuel their GPU sales, as the ban will more than likely increase the demand for cryptocurrency-related GPUs. With the ban, the only way to acquire cryptocurrencies mined with GPUs is to mine them with computing power. As such, individuals looking to acquire cryptocurrencies in China now have to acquire more computing power, in place of making straight purchases via exchanges. Essentially, Nvidia’s sentiments is that isn’t a downhill spiral for cryptocurrencies; actually, other industries will receive a boost as well.