Due to China's ICO ban, what helps the cryptocurrency world?
The biggest event in the world of cryptocurrencies has recently been the declaration by the Chinese authorities to close cryptocurrency exchanges. As a result, BTCChina, one of China's largest bitcoin exchanges, said it would cease trading activities by the end of September. This news catalysed a sharp sell-off, causing the Bitcoin (and other currencies like Etherium) to fall about 30% below the record highs reached earlier this month.
So, cryptocurrency with trains goes on. Because bitcoins have increases that exceed four-fold values from December 2016 to September 2017, some analysts have predicted that cryptocurrencies may recover from recent falls. Josh Mahoney, a market analyst at IG, commented that "the past experience of cryptocurrencies tells us (they) are likely to address these recent challenges."
However, these sentiments do not come without opposition. Mr Dimon, CEO of JPMorgan Chase, noted that bitcoin "will not work" and "is a scam … worse than tulip bulbs (in reference to the 17th-century Dutch" tulips mania, recognized as the first speculative bubble in the world) … to blow up. "He goes on to say that he will fire employees who are foolish enough to trade in bitcoins.
Speculation aside, what's really going on? Following the ICO ban in China, other leading global economies are taking a fresh look at how the world of cryptocurrencies should / can be regulated in their regions. Instead of banning ICOs, other countries still acknowledge the technological benefits of cryptocurrency and seek to control the market without stifling currency growth completely. The big problem for these economies is figuring out how to do this, because the alternative nature of cryptocurrencies does not allow them to be ranked in the policies of traditional investment assets.
Some of these countries include Japan, Singapore and the United States. These economies seek to set accounting standards for cryptocurrencies, mainly to address money laundering and fraud that have been made more elusive by cryptocurrency. However, most regulators recognize that there seems to be no real benefit to completely banning cryptocurrencies because of the economic flows they bring along. Also, probably because it's practically impossible to turn off cryptocurrency while the Internet is in place. Regulators can only focus on areas where they can exercise some control, which seems to be where cryptocurrencies correspond to fiat currencies (ie cryptocurrency exchanges).
Although cryptocurrencies seem to be subject to greater scrutiny over time, such developments are of benefit to some countries such as Hong Kong. Following the ban of the Chinese ICO, many founders of cryptocurrency projects were moved from the mainland to the city. Aurelian Mennant, CEO of Gatecoin, said the company had received "a large number of inquiries from the founders of mainland-based blockchain projects" and that there had been a jump in the number of Chinese customers registering with the platform.
Looking a little further, companies like Nvidia have expressed positiveness about the event. They argue that this ICO ban will only feed their GPU sales, as this ban will likely increase demand for cryptocurrency-related GPUs. With the ban, the only way to get cryptocurrencies extracted with GPUs is to get them with computing power. As such, people who want to get cryptocurrencies in China must now receive more processing power than direct stock purchases. Essentially, Nvidia's sentiment is that it's not a downward spiral for cryptocurrencies; in fact, other industries will get a boost.
In the light of all the turmoil and debate over cryptocurrencies, the integration of technology in world economies seems to be quickly materializing. Whether you believe in the future of technology or not, or consider it a "scam … to explode", the cryptocurrency train is one that deserves your attention.