It seems the cryptocurrency market has been dicated by the bears for a past few days with lots of red showing on all the popular cryptocurrencies including BTC, ETH, DASH, IOTA and more! The weekend was a bloodbath with many coins down multiple digit percentages and for unlucky holders that got caught with their pants down holding NEO yesterday, they were unpleasantly surprise due to China's news that they are 'banning' (or probably more likely, regulating) Chinese ICOs.
The market reacted very negatively to this news as you could imagine. But is the party truly over? Not by a longshot.
The declaration Monday by China's central bank that initial coin offerings are illegal and should be halted immediately shouldn't come as any surprise.Beijing had been mulling a plan for controlling this year's boom in cryptocurrencies, with QQ.com reporting last week that authorities met with the chief securities and banking watchdogs. The state-endorsed National Internet Finance Association had also warned that ICOs pose a financial risk and may disrupt social economic order.
If you recall back in 2016 China made a similar announcement about how Bitcoin should be illegal which sent the market into a parabolic dive only to go back on its word later...
In my opinion ICOs should be regulated but not banned... And, Tim Culpur said as much in his article entitled 'China Herds ICO Cats'
The problem is that some ICOs, backed by viable business models, could be worth quite a lot. But given the billions of dollars poured into coin offerings this year, the financing model's growing popularity across business types, and the contagion risk from potential cross-pollination, China's government is right to want to avoid the kind of turmoil that may come with a 90 percent failure rate.
In an article published by CoinTelegraph it proposed that regulation will be a good thing for Chinese ICOs bringing added investor confidence to a highly untransparent market.
The Chinese government’s regulations on ICOs stem from public outrage over the large number of pyramid schemes in the country. China is set to decide on the proposed ICO regulatory measures this September following public consultations.
The regulations will focus on various fundraising activities in China, including Initial Coin Offerings. If these proposed regulations are made into law, they will likely help boost NEO since the regulated ICO market will give investors confidence.
That proposition was stipulated in a Reddit article by bentylerlive.
Here's an excerpt from the statement found on Reddit:
“First off, to all the people who think China will ban ICO's: That's simply not going to happen. It would make a lot of very rich people angry in China. Let me explain.Having specific rules in place gives the market a sense of permanency and legitimacy. It reassures many investors in China that the Chinese government is watching very closely for cases of fraud, and will react in order to[sic] protect the public. That's bullish for NEO. Incoming regulations were inevitable. Even if they weren't, we still don't want a series of low quality ICO's clogging up the NEO platform. NEO should be associated with quality and functionality, first and foremost. Like all of you, I look forward to NEO becoming the premier digital platform led by the fine folks in China, and now we are one step closer to that goal.”
Remember that recent news was written in Chinese and has only been interpreted by mainstream western news outlets so far. We may be surprised at the coming announcements from China and it's flagship cryptocurrency platform NEO.
Techblogger Wrap Up
What do you think about the past few red days in cryptocurrency? Do you feel we are entering another bear market like we saw in July or is the market about to explode upwards as it has done in the past.
Will the Chinese actually 'ban' ICOs or will they just regulate them providing extra confidence and security in their efficient markets?
Leave your thoughts, comments and feedback below.
Thanks for reading!
Source:
China Herds ICO Cats - Bloomberg
There was a $20 billion cryptocurrency price correction over the weekend - Business Insider
NEO To Benefit from Chinese ICO Regulations - CoinTelegraph
IMG Source:
Business Insider
I enjoyed this article. I think it's a good thing for the reasons that you mentioned: weak/fake currencies should be flushed out, investors are protected against pyramid schemes. I also think that it leads to a legitimacy to cryptocurrencies - there do need to be structures in place to ensure that people are protected. What does it help investing in a company in return for a new crypotcurrency if it is a scam? I read somewhere that China has fewer regulations than the US, and thus its population is not very well protected. So, to repeat, there was a knee jerk reaction, but I think that this is a good thing long term.
Yes. The potential gains far outweigh yesterday's losses. Increased stability will greatly improve confidence and transparency as China moves forward with ICOs.
What type of structures/regulations do you think will come into place? What type of structures/regulations do you think are needed?
War on crypto will only proceed forward, but i believe crypto has reached a stage where it is a defacto. Thanks for your writeup @techblogger .
I heard that the ICOs in Progress will have to issue refunds the Chinese buyers. Can anyone comment if this is true or not. and if so any Idea how much EOS will have to payback to the Chinese market and haw it will effect the price of the EOS offerings.
Great post. From my understanding of how doing business in China works, even when the rules are in place, companies will bribe their way around the rules. Below is a forbes article on the subject. Questionable offerings would probably have questionable people running it who would be happy to do this; and on the other hand, legitimate offerings may eventually succumb to this unethical practice in order to push their offering through. So hard to guage whether this is a net positive.
https://www.forbes.com/sites/richardlevick/2015/01/21/new-data-bribery-is-often-an-unspoken-rule-in-china/#66f1547579c6
Very solid viewpoint. I agree this may be where we are going... Simply a way to manage bribes more effectively.
https://steemit.com/bitcoin/@incpress/where-did-the-30-billion-capitalization-go-with-coinmarketcap
What do you think about it?
Another FUD, in my opinion China is anti-crypto.
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