During the wake of China’s ICO ban, what befalls the field of cryptocurrencies?
The biggest event in the cryptocurrency world recently is the declaration of the Chinese authorities to shut down the swaps on which cryptocurrencies are traded. As a result, BTCChina, one of the most well known bitcoin mixer exchanges in China, said that it would be ceasing exchanging activities by the end of September. This news catalysed a clear sell-off that left bitcoin (and other currencies just like Etherium) plummeting approximately 30% below the record highs who were reached earlier this month.
So , the cryptocurrency rollercoaster persists. With bitcoin having increases that surpass quadrupled valuations from December 2016 to September 2017, some analysts predict that it can cryptocurrencies can recover from the recently available falls. Josh Mahoney, a market analyst at IG commentary that cryptocurrencies’ “past experience tells us that [they] will likely brush these latest challenges aside”.
Nevertheless 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… more painful than tulip bulbs (in reference to the Dutch ‘tulip mania’ of the 17th century, recognised as the world’s primary speculative bubble)… that will blow up”. He goes to the exact extent of saying that he would fire employees who were brainless enough to trade in bitcoin.
Speculation aside, what the heck 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, many other countries still recognise the technological benefits of crypto-technology, and tend to be looking into controlling the market without completely stifling the growth in the currencies. The big issue for these economies is to figure out how to achieve this, as the alternative nature of the cryptocurrencies do not allow them to often be classified under the policies of traditional investment assets.
These countries include Japan, Singapore and the US. These economies seek to establish accounting standards for cryptocurrencies, mainly in an effort to handle money laundering and fraud, which have been rendered even more elusive due to the crypto-technology. Yet, most regulators do have an understanding of that there seems to be no real benefit to completely banning cryptocurrencies due to the economic flows that they carry along. Also, perhaps because it is practically impossible to shut down the crypto-world for as long as online exists. Regulators can only focus on areas where they may be able to work out some control, which seems to be where cryptocurrencies meet correios currencies (i. e. the cryptocurrency exchanges).
While cryptocurrencies seem to come under more scrutiny as time on, such events do benefit some countries like Hk. Since the Chinese ICO ban, many founders of cryptocurrency projects have been driven from the mainland to the city. Aurelian Menant, CEO of Gatecoin, said that the company received “a high number of inquiries from blockchain project founders headquartered the mainland” and that there has been an observable surge during the number of Chinese clients registering on the platform.
Looking marginally further, companies like Nvidia have expressed positivity with the event. They claim that this ICO ban will only power their GPU sales, as the ban will likely increase the demand for cryptocurrency-related GPUs. With the ban, the only way to obtain cryptocurrencies extracted with GPUs is to mine them with computing power. So ,, individuals looking to obtain cryptocurrencies in China now have to obtain additional computing power, as opposed to making straight purchases via deals. In essence, Nvidia’s sentiments is that this isn’t a downhill spiral pertaining to cryptocurrencies; in fact , other industries will receive a boost as well.
Because of all the commotion and debate surrounding cryptocurrencies, the integration on the technology into the global economies seem to be materialising hastily. No matter whether you believe in the future of the technology, or think that it is a “fraud… that will blow up”, the cryptocurrency rollercoaster is one truly worth your attention.