The biggest event in the cryptocurrency world recently was the declaration of the Chinese authorities to turn off the exchanges which cryptocurrencies are traded. Therefore, 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 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 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)… which will blow up”. He goes to the extent of saying that he would fire employees who have been stupid enough to trade in bitcoin.
Speculation aside, what’s 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 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. Tipping Token for these economies is 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 determine accounting standards for cryptocurrencies, mainly so as to handle money laundering and fraud, which were rendered more elusive because of the crypto-technology. Yet, most regulators do recognise that there is apparently no real benefit to completely banning cryptocurrencies as a result of economic flows that they carry along. Also, probably since 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 in a position to exercise some control, which is apparently 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 amount 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 declare that this ICO ban is only going to fuel their GPU sales, because the ban will likely increase 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. As such, individuals looking to obtain cryptocurrencies in China now have to obtain more computing power, instead of making straight purchases via exchanges. In essence, Nvidia’s sentiments is that isn’t a downhill spiral for cryptocurrencies; in fact, 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 believe it is a “fraud… which will inflate”, the cryptocurrency rollercoaster is one worth your attention.