With the turn of the year nearing, what is the future of bitcoin or cryptocurrencies as a whole?
After reaching a record high of USD4,921 on the first day of September 2017, as concerns were raised due to an impending crackdown by the Chinese government, the digital currency fell as low as USD 2,975 on 15 days later. However, the leader of the pack of cryptocurrencies has breached USD 4,000, soaring more than 20 percent from the lows reached on the fateful Friday.
The anticipated reaction from the market witnessed a strong rebound after the news were released. This good showing revealed several answers to the cryptocurrency market.
There are varying views from academics. According to Mr Peter Van Valkenburgh, director of research at Coin Center, a non-profit research firm focusing on cryptocurrencies base in Washington, prices are rebounding because traders in China are likely to switch to alternative exchanges as a solution. Market players suspect the underlying reason why the Chinese government desired for such a ban is because the technology works and is performing with accordance to what it should and can do. When it overcomes those controls, then it’s further proof that it’s independent from government controls, which in itself further cements its decentralisation feature.
China banned fundraising by selling digital coins, known as initial coin offerings, and plans to ban trading of bitcoin and other virtual currencies on domestic exchanges. These tighter regulations will result in assess to cryptocurrencies harder but within the global landscape, the solutions are plenty and the hype about it just cannot be stopped.
On review, China’s weight on the broader cryptocurrency market isn’t as high as it once was, so changes in regulation have lower potential impact. Bitcoin trading against the Chinese currency has dwindled to 19 percent of total volume in the past 6 months, from about 90 percent last year, according to digital currency data website Bitcoinity, after Chinese regulators clamped down on the market earlier this year. The U.S. dollar is now the most traded currency against bitcoin, accounting for 54 percent of total volume in the past six months.
Powerful and new platforms like www.prime-exchange.com, which is currently trading one of the most sought after new altcoin, the Gold Dollar, are amongst the ones making shifts and adjustments to curb this ban in China. Moving base to other jurisdictions where regulations are more pro-crypto, is a no brainer. When interviewed, www.prime-exchange.com spokesman revealed that the global market is large enough to nurture the growth of any cryptocurrency.
Bitcoin as a natural indicator and always survived such incidents, as historical events in 2017 have shown. Time and again, digital assets have recovered and is an understatement, as for the case of Bitcoin, its price has almost quadrupled since.
It is now a concerted view that this ban has a lower potential impact than what was feared. Cryptocurrencies like Bitcoin and up and coming altcoins like the Gold Dollar will continue to blossom. For some Bitcoin at USD4,000 is the level to watch.
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