The Chinese against ICOs and its Impact on the Crypto Currency market
Just when you thought that the Crypto Currency Market had exhausted its means of extending out more, it introduced its own bonds and treasuries in the form of ICOs (Initial Coin Offerings). In layman terms, these are basically crowd funds which are accumulated in an unregulated environment for people to startup businesses and ventures.
The fact that we compared these to bonds might make you think that the investors get back their investment with added benefits, but that is where the Chinese government intervened and realized something devastating.
What Was the Problem?
ICO startups in China had grown phenomenally and in 2017 alone collectors have been able to gather a fund of around $1.8 billion already. However, it was found that most of these collectors were actually in for a fraudulent one-sided deal. They issued Crypto Currency tokens which they would never give back and basically ran with the money.
The Chinese government had a few obvious problems with this:
What if these collectors actually belonged to cartels which operated businesses of bringing money out of China through the use of digital currency? This essentially meant that the Chinese balance of payment would be in ruins and nothing was being offered in exchange.
They realized that people would start using this easy money as a way of life and would ultimately saturate the market, leading to the loss of any interest individuals had ever shown in Crypto Currencies. Seeing how the times are advancing, the world could not have afforded that, which is why the step to ban ICOs is perhaps a savior for these currencies in the future.
How Is It a Savior?
If unregulated crowd funding will not be operated any longer, many people will instantly lose interest in the currencies. What these people fail to realize is that fraudulency in this funding is quite common and that this step has actually paved the way for better and more authentic investors and collectors to finally enter the market.
Nobody is kind enough to offer a doubled rate for an investment you make right now without anything in exchange, which is why you as an investor should never believe in these surreal features to begin with. In addition, these authentic collectors will give out tokens and be in touch with the government, so that the concerns regarding taxes and a proper infrastructure for the collection and release being built could be addressed.
What Is the Expected Trend?
Crypto Currencies worldwide seem to be taking hits simply because concerned authorities are busying in removing the easy money element from them. However, we feel that the number of investors will not fall simply because even now the trading prospects are quite marvelous.
In addition, operators are busy in opening e-commerce markets, ATMs, securer channels, and wallets for you to instantly use your currency with a proper database intact, so even if the trend seems slowed down right now, the near future will bring more and more attendance in the market.
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