In the wake of China’s ICO ban, what befalls the world of cryptocurrencies?
The biggest event in the cryptocurrency world recently was the declaration of the Chinese authorities to shut down the exchanges on which cryptocurrencies are traded. As a result, BTCChina, one of the largest bitcoin exchanges in China, said that it would 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, some analysts predict that it can cryptocurrencies can recover from the recent falls. Josh Mahoney, a market analyst at IG comments that cryptocurrencies’ “past experience tells us that [they] will likely brush these latest challenges aside”. best altcoins 2021
However, 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… worse than tulip bulbs (in reference to the Dutch ‘tulip mania’ of the 17th century, recognised as the world’s first speculative bubble)… that will blow up”. He goes to the extent of saying that he would fire employees who were stupid enough to trade in bitcoin.
Speculation aside, what 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, 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 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 based in the mainland” and that there has been an observable surge in the number of Chinese clients registering on the platform.