Cryptocurrency’s Rocky Road: China’s ICO Ban

In the wake of China’s ICO ban, what befalls the world of cryptocurrencies?

The greatest event in the cryptocurrency universe recently was the declaration of the Chinese authorities to shut down the exchanges where cryptocurrencies are traded. As a consequence, BTCChina, one of the largest bitcoin exchanges in China, said it would be ceasing trading activities by the conclusion of September. This info catalysed a sharp sell off that left bitcoin (and some other currencies such as Etherium) plummeting approximately 30 % below the record highs which often were reached previously this month.

So, the cryptocurrency rollercoaster goes on. With bitcoin having increases that surpass quadrupled values from December 2016 to September 2017, several analysts believe it can cryptocurrencies can overcome the latest falls. Josh Mahoney, a market place analyst at IG commentary that cryptocurrencies’ “past experience informs us that [they] will likely brush these latest problems aside”.

Nevertheless, these sentiments do not come without opposition. Mr Dimon, CEO of JPMorgan Chase, remarked that bitcoin “isn’t gon na work” and that it “is a fraud… even worse compared to tulip bulbs (in reference to the Dutch’ tulip mania’ of the 17th century, recognised as the world’s first speculative bubble)… which will blow up”. He visits the extent of thinking that he would fire individuals who were stupid enough to exchange in bitcoin.

Speculation aside, what’s going on? Since China’s ICO ban, additional world leading economies are having an innovative look into how the cryptocurrency industry should/ will be regulated in their places. Instead of banning ICOs, many other countries even now recognise the technological great things about crypto-technology, and are looking into managing the marketplace without totally stifling the expansion of the currencies. The main problem for these economies is to figure out the way to do this, as the solution dynamics of the cryptocurrencies don’t enable them being classified under the policies of conventional investment assets.

Some of Japan is included by these countries, Singapore and the US. These economies seek to establish accounting standards for cryptocurrencies, largely in order to manage money laundering and fraud, which are rendered more elusive because of the crypto technology. Nevertheless, the majority of regulators do recognise that there seems to be no real benefit to completely banning cryptocurrencies on account of the economic flows that they carry along. Also, probably because it is practically impossible to shut down the crypto-world for as long as the internet exists. Regulators can only concentrate on places that they may be able to exercise some control, which regularly appears to be exactly where cryptocurrencies fulfill fiat currencies (i.e. the cryptocurrency exchanges).

While cryptocurrencies seem to come under a lot more scrutiny as time progresses, such functions do profit some countries like Hong Kong. Since the Chinese ICO ban, a lot of founders of cryptocurrency projects are led from the mainland to the community. Aurelian Menant, CEO of Gatecoin, said that the company received “a high amount of requests from blockchain venture founders primarily based in the mainland” and that there has become an observable surge in the number of Chinese consumers registering on the platform.

Looking a little further, companies as Nvidia have conveyed positivity from the event. They claim that this particular ICO ban will simply fuel their GPU income, as the ban will probably raise the demand for cryptocurrency related GPUs. With the ban, the sole method to obtain cryptocurrencies mined with GPUs is mining them with computing power. So, individuals looking to acquire cryptocurrencies in China now have to obtain more computing power, rather than producing straight buying via exchanges. Essentially, cryptocurrency signals is that this is not a downhill spiral for cryptocurrencies; in reality, many other industries will receive a boost in the process.

In light of all the commotion and controversy surrounding cryptocurrencies, the integration of the science inside the global economies seem to be materialising hastily. If you think in the future of the technology, and believe that it is a “fraud… which will blow up”, the cryptocurrency rollercoaster is but one worth the attention of yours.

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