The biggest event in the cryptocurrency world recently was the declaration of the Chinese authorities to turn off the exchanges which cryptocurrencies are traded. Subsequently, BTCChina, one of the largest bitcoin exchanges in China, said that it will be ceasing trading activities by the finish of September. This news catalysed a sharp sell-off that left bitcoin (and other currencies such as for example Etherium) plummeting approximately 30% below the record highs which 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 could cryptocurrencies can get over the recent falls. Josh Mahoney, a market analyst at IG comments that cryptocurrencies’ “past experience tells us that [they] will probably brush these latest challenges aside”.
However, Bitcoin Cash Token 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 mention of the Dutch ‘tulip mania’ of the 17th century, recognised as the world’s first speculative bubble)… that may blow up”. He goes to the extent of saying he would fire employees who were stupid enough to trade in bitcoin.
Speculation aside, what’s 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. Instead of banning ICOs, other countries still recognise the technological great things about crypto-technology, and are looking at controlling the market without completely stifling the growth of the currencies. The big issue for these economies would be to figure out how to do this, because the alternative nature of the cryptocurrencies do not allow them to be classified beneath the policies of traditional investment assets.
Many of these countries include Japan, Singapore and the US. These economies seek to determine accounting standards for cryptocurrencies, mainly so as to handle money laundering and fraud, which were rendered more elusive as a result of crypto-technology. Yet, most regulators do recognise that there seems to be no real benefit to totally banning cryptocurrencies due to the economic flows they carry along. Also, probably since it is practically impossible to turn off the crypto-world so long as the internet exists. Regulators can only focus on areas where they might be in a position to exercise some control, which seems to be where cryptocurrencies meet fiat currencies (i.e. the cryptocurrency exchanges).
While cryptocurrencies appear 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 already 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.
Looking slightly further, companies like Nvidia have expressed positivity from the event. They claim that this ICO ban will only fuel their GPU sales, as the ban will likely raise the demand for cryptocurrency-related GPUs. With the ban, the only way to acquire cryptocurrencies mined with GPUs would be to mine them with computing power. Therefore, individuals looking to obtain cryptocurrencies in China now have to obtain additional computing power, as opposed to making straight purchases via exchanges. Essentially, Nvidia’s sentiments is that this isn’t a downhill spiral for cryptocurrencies; actually, other industries will get a boost as well.
In light of all commotion and debate surrounding cryptocurrencies, the integration of the technology into the global economies seem to be materialising hastily. Whether you believe down the road of the technology, or believe it is a “fraud… which will blow up”, the cryptocurrency rollercoaster is one worth your attention.
