The largest event in the cryptocurrency world recently was the announcement of the Chinese authorities to shut down the exchanges where cryptocurrencies are traded. Because of this, BTCChina, among the most significant bitcoin exchanges in China, stated that it would be ceasing trading activities by the end of September. This information catalysed a sharp sell-off that abandoned bitcoin (along with other currencies like Etherium) plummeting approximately 30% below the record highs which were reached earlier this month.
So, the Best crypto rollercoaster proceeds. With bitcoin having increases that transcend quadrupled worth from December 2016 to September 2017, some analysts forecast it could cryptocurrencies can recuperate from the recent drops. Josh Mahoney, a market analyst in IG comments that cryptocurrencies'”past experience tells us that [they] will likely brush these newest challenges aside”.
Mr Dimon, CEO of JPMorgan Chase, remarked that bitcoin”isn’t likely 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”. 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 queries from blockchain job founders based in the mainland” and that there has been an visible surge in the number of Chinese customers registering the platform.
Looking slightly further, companies such as Nvidia have voiced positivity from the occasion. They claim this ICO ban is only going to fuel their GPU sales, since the ban will probably boost the demand for cryptocurrency-related GPUs. Together with the ban, the only way to obtain cryptocurrencies mined with GPUs is to mine with calculating power. Therefore, individuals seeking to obtain cryptocurrencies in China now have to obtain more computing power, instead of making direct purchases through exchanges. In essence, Nvidia’s thoughts is that this is not a downhill spiral for cryptocurrencies; in fact, other businesses will be given a boost as well.