It all started with China.
On 4 September, the People’s Bank of China issued a sharp statement labelling token sales (initial coin offerings) ‘illegal’ and ‘disruptive’ to economic and financial stability. CoinDesk columnist Noelle Acheson wrote that China’s actions were ‘understandable and reasonable.’
It’s understandable because of China’s huge financial market which is difficult to control. ‘Take trillions of dollars-worth of opaque financial products with little regulation, add a get-rich-quick mentality and you have a simmering cauldron of trouble that could overflow at any time,’ Acheson writes.
It was also a reasonable way to protect investors, as around ‘90 percent of issuances so far this year may have been fraudulent,’ Acheson writes.
Bitcoin Price Decline
As reported by The New York Times:
‘The exchange’s decision is the first of its kind in China, and it raises the spectre of other exchanges shutting down Bitcoin trading in the future.
‘China has sought to walk a tightrope when it comes to Bitcoin and similar virtual currencies. Whereas the currencies provide the country with a chance to develop new and emerging technologies, officials also worry that they would allow Chinese consumers to get around tough restrictions on how much money they can send overseas and allow them to be used to launder money.’
The End of Bitcoin Gold Rush?
Yet it’s hard to see this being the end of the bitcoin gold rush.
Yes, the whole situation surrounding bitcoin does ‘look’ bubbly. However, with so much money invested in cryptos and hundreds of millions poured into the blockchain infrastructure, there’s little chance it will all be thrown away because of a Chinese ban.
In truth, it is extremely hard to price bitcoin. But if you’d like to learn all about the secret world of bitcoin, and how you could potentially take advantage of its emergence, click here.
Junior Analyst, Money Morning