Bitcoins have been the topic of conversation within the investment world for quite some time now, building in value and flirting with the mainstream in a seemingly unstoppable rise. All of that came to an uncomfortable halt over the past few weeks however in a series of events that have led many to question whether or not the cryptocurrency is still the leading name in the future of financial assets.
Worrying news from China
The major concerns started when Chinese authorities released a statement in early September that deemed raising funds through initial coin offerings (ICOs), unlawful. They claimed this was part of their ongoing efforts to increase financial and social security for consumers, stating that the unregulated manner of crowdfunding via ICOs comes with too much risk. With China being such a significant player in the realm of cryptocurrencies, such decisions are always likely to have a ripple effect that will be felt the world over, and that has indeed been the case. The value of Bitcoins plummeted for the first time in months, as did several other forms of cryptocurrency, with much confusion and mixed messages from Chinese regulatory agencies leading some to even fear the possibility of an eventual blanket ban on all forms of cryptocurrency in the country.
The fallout
Soon after the announcement, BTCC, one of China’s biggest and best-known Bitcoin exchanges, announced that with immediate effect, they would no longer be accepting new accounts, before ceasing all trading on 30th September of this year.
It certainly didn’t help those trying to calm the situation when, around the same time, the Financial Conduct Authority, a UK watchdog, published a statement warning consumers about the risks of ICOs, mirroring many of the concerns raised by their Chinese counterparts and thus suggesting the notion that perhaps crackdowns could start hitting our shores too in the not so distant future.
Is this the end of Bitcoin?
It’s well worth note that all currencies, both traditional and digital, are subject to periods of fluctuation and volatility, particularly in response to big financial news stories such as those that broke from China – just look at the floundering performance of the pound ever since the Brexit vote. Bitcoin’s value is, in fact, still well up on previous years, and with the dust beginning to settle somewhat, has already recovered by about 30% following the early sense of panic.
As things stand, China has not announced any such outright ban, and with the value of Bitcoin evidently coming back strong, it’s clear the cryptocurrency is going nowhere without a fight. Perhaps in reality, this could merely be a storm we all need to ride out, with the long-term future of digital trading hopefully becoming clearer as we head through the following weeks and months, and adjust to the new financial landscape before us. Things may indeed have to change, but that doesn’t necessarily have to spell the end just yet.
Leave a Reply