Following the apparent conformation that Chinese financial authorities are actually going to ban Bitcoin exchanges from operating in the massive emerging market, the price of the cryptocurrency is now trading at just above $3270 – down from a record high of $5000 earlier this month.
Bitcoin advocates have came out in force in online community forums and on social media to say this is just a buying opportunity because they expect the price to rise again. Their main arguments are that no one can ban Bitcoin itself due to the blockchain technology at its core and that the news that government regulators (and bankers such as JPMorgan CEO Jamie Dimon) are attacking it proves Bitcoin is a growing threat to them.
No Government can stop the rise of crypto now. Bankers begin to panic. The old ripoff financial systems are crumbling. Beautiful! #bitcoin
— Kim Dotcom (@KimDotcom) September 14, 2017
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Rob Viglione, co-founder of ZenCash, commented: “The big question is whether this shock is already internalized into asset prices, or if there’s risk of a continued cascading sell-off. One good thing about crypto markets is that they are largely equity-based, and not massively interconnected webs of leveraged derivatives with unknown counterparties, as is the norm in modern banking. The China ICO ban and the cessation of trading certainly have deep initial impact to prices, but also a much smaller marginal contribution to systemic risk than we’re used to seeing from large financial institutions, like Dimon’s JPMorgan.”
The deadwood of the Bitcoin ecosystem is leaving now. Our faith in the crypto economy will be well rewarded.
— Tim Draper (@TimDraper) September 15, 2017
Bharath Rao, CEO of Leverj, a decentralized platform for cryptocurrency derivatives trading, said: “For those of us in the exchange space, the possibility of governments clamping down on exchanges is a foregone conclusion ever since bitcoin was first noticed by the government.
The price is always a solid metric of the markets’ greed and fear, and reflects regulatory uncertainty at the moment. This also signals that development of non-custodial and decentralized models will accelerate. Regulation is neither necessary nor possible for decentralized models, and the future may have gotten just a bit brighter by nudging the crypto community to develop high speed, non-custodial exchanges.”
Jason English, VP of Protocol Marketing at Sweetbridge, added: “China is practically building a cottage industry for mining and exchanging bitcoin and other cryptocurrencies, so it is hard to believe that they intend to exit a market with so much potential upside. Even the apparent ban on ICOs seemed to be more of a stopgap in order to get some policies in place. If anything, this example shows the volatility of the space and that some market-makers can likely take advantage of an unclear news cycle to create a sell-off and buy back opportunity.”