mrebviesThe biggest event in the crypto currency world recently was the declaration of the Chinese authorities to turn off the exchanges which cryptocurrencies are traded. Due to this fact, BTCChina, among the 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, 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 tulip bulbs (in mention of the Dutch ‘tulip mania’ of the 17th century, recognised because 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 going for 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 marketplace without completely stifling the growth of the currencies. The big issue for these economies would be to figure out how to do that, as the alternative nature of the cryptocurrencies do not allow them to be classified beneath the policies of traditional investment assets.
A few of these countries include Japan, Singapore and the united states. These economies seek to establish accounting standards for cryptocurrencies, mainly to be able to handle money laundering and fraud, which have been rendered more elusive as a result of crypto-technology. Yet, most regulators do recognise that there appears to be no real benefit to completely banning cryptocurrencies as a result of economic flows they carry along. Also, probably because it is practically impossible to shut down the crypto-world so long as the internet exists. Regulators can only focus on areas where they might be able to exercise some control, which appears 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 town. Aurelian Menant, CEO of Gatecoin, said that the business received “a high number of inquiries from blockchain project founders based in the mainland” and that there has been an observable surge in the amount of Chinese clients registering on the platform.
Looking slightly further, companies like Nvidia have expressed positivity from the function. They declare that this ICO ban is only going to fuel their GPU sales, as the ban will likely increase the demand for cryptocurrency-related GPUs. With the ban, the only way to acquire cryptocurrencies mined with GPUs is to mine them with computing power. As such, individuals seeking to obtain cryptocurrencies in China now have to obtain additional computing power, instead of making straight purchases via exchanges. In essence, 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 the commotion and debate surrounding cryptocurrencies, the integration of the technology in to the global economies seem to be materialising hastily. Whether you believe in the foreseeable future of the technology, or think that it is a “fraud… that may inflate”, the cryptocurrency rollercoaster is one worth your attention.
bilal
sarcastic_guy