In the aftermath of China’s ICO ban, what amuses the world of cryptocurrencies?
The biggest event in the cryptocurrency world lately was the announcement of the Chinese authorities to shut down the trades on which cryptocurrencies are traded. Because of this, BTCChina, one of the largest bitcoin markets in China, stated that it would be quitting trading actions by the end of September. This information catalysed a sharp sell-off that left bitcoin (and other currencies such as Etherium) plummeting approximately 30 percent below the record highs which were reached earlier this month.
So, the cryptocurrency rollercoaster continues. With bitcoin having increases that surpass quadrupled worth from December 2016 to September 2017, some analysts predict that it can cryptocurrencies can recover from the recent falls. Josh Mahoney, a market analyst at IG remarks that cryptocurrencies'”previous 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”is not going to work” and that it”is a fraud… worse than tulip bulbs (in reference to the Dutch’tulip mania’ of the 17th century, called the world’s first speculative bubble)… which will blow up”.
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, other countries still recognise the technological benefits of crypto-technology, and are looking into controlling the market without completely stifling the growth of the currencies. The big issue for these economies is to figure out how to do this, as the alternative nature of the cryptocurrencies do not allow them to be classified under 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, which have been rendered more elusive due to the crypto-technology. Yet, most regulators do recognise that there seems to be no real benefit to completely banning cryptocurrencies due to 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 focus on areas where they may be able to exercise some control, which seems to be 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. Since the Chinese ICO ban, many founders of coinmarketcap projects have been driven from the mainland to the city. Aurelian Menant, CEO of Gatecoin, said that the company received”a large number of inquiries from blockchain job founders based from the mainland” and that there has been an observable surge in the amount of Chinese customers registering the platform.
Looking slightly further, companies such as Nvidia have expressed positivity from the occasion. They assert that this ICO ban will only fuel their GPU sales, as the ban will probably boost the demand for cryptocurrency-related GPUs. Together with the ban, the only way to obtain cryptocurrencies mined with GPUs would be to mine with calculating power. As such, individuals looking to obtain cryptocurrencies in China now have to obtain more computing power, as opposed to creating straight purchases via exchanges. Essentially, Nvidia’s thoughts is that this isn’t a downhill spiral for cryptocurrencies; in reality, other businesses will receive a boost as well.