Aarti Aunty

Cryptocurrency’s Rugged Route: China’s ICO Suspend

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

The largest event in the cryptocurrency world recently was the declaration of the Chinese authorities to shut down the exchanges on which cryptocurrencies are traded. Consequently, BTCChina, one of many largest bitcoin exchanges in China, said that it could 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” ;.

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 crypto signals tulip bulbs (in mention of the the Dutch ‘tulip mania’ of the 17th century, recognised whilst the world’s first speculative bubble)… that’ll blow up” ;.He goes to the extent of saying he would fire employees who have been stupid enough to trade in bitcoin.

Speculation aside, what is actually going on? Since China’s ICO ban, other world-leading economies are going for a fresh look into the way the cryptocurrency world should/ can be regulated within their regions. As opposed to banning ICOs, other countries still recognise the technological advantages of crypto-technology, and are looking at controlling the marketplace without completely stifling the growth of the currencies. The major problem for these economies is to figure out how to get this done, as the alternative nature of the cryptocurrencies don’t allow them to be classified underneath the policies of traditional investment assets.

Some of these countries include Japan, Singapore and the US. These economies seek to determine accounting standards for cryptocurrencies, mainly to be able to handle money laundering and fraud, which have been rendered more elusive because of the crypto-technology. Yet, most regulators do recognise that there appears to be no real benefit to totally banning cryptocurrencies because of the economic flows they carry along. Also, probably because it is practically impossible to shut down the crypto-world for so long as the net exists. Regulators can just only give attention to areas where they may be able to exercise some control, which appears 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. Considering that the Chinese ICO ban, many founders of cryptocurrency projects have already been driven from the mainland to the city. Aurelian Menant, CEO of Gatecoin, stated that the company received “a high number of inquiries from blockchain project founders located in the mainland” and that there’s been an observable surge in the number of Chinese clients registering on the platform.

Looking slightly further, companies like Nvidia have expressed positivity from the event. They claim that ICO ban will simply fuel their GPU sales, whilst the ban will likely raise the demand for cryptocurrency-related GPUs. With the ban, the only method to acquire cryptocurrencies mined with GPUs is to mine them with computing power. As a result, individuals looking to acquire cryptocurrencies in China now have to acquire more computing power, as opposed to making straight purchases via exchanges. Basically, Nvidia’s sentiments is that isn’t a downhill spiral for cryptocurrencies; actually, other industries will receive a boost as well.