Pavel Krymov, a famous expert on financial markets, urges investors to stop panicking about the news that China supposedly banned Bitcoin.
Around a week ago, international headlines cried that the People’s Bank of China had banned ICOs. For those of you who don’t know, an ICO stands for an Initial Coin Offering and has to do with crypto currencies.
Numerous experts representing international mass media only added the fuel to the fire by commenting on the news and saying that the Chinese regulator had banned cryptocurrency trading on specialized exchanges.
This led to an instant market crash. In particular, the market of cryptocurrencies saw its capitalization drop from $154 billion all the way down below $140 billion. International investors have been panicking ever since. They say, if the world’s second-biggest economy bans cryptocurrencies, maybe this is the end of the cryptocurrency era. Somehow those guys once believed that the international market of cryptocurrencies is not another forex, and there can’t be any retracement in the market, which is obviously not the case. Any financial market is subject to ups and downs.
On his official website, Pavel Krymov recommended traders and investors against panicking. He offered them to take a deep breath, calm down and look at the following things:
1. First of all, they say the People’s Bank of China is going to ban cryptocurrency trading on exchanges but go on with OTC trading, including buying and selling Bitcoins and other digital currencies by individuals. However, that’s not logical. The Chinese financial regulator is trying to do exactly the opposite – total control and centralization – which is easier to do when they trade currencies on exchanges rather than being involved in OTC trading.
2. Secondly, the news made the market crash by 15-20%, while it should have been 30-40% given the scale of the event and China’s share in the global market of cryptocurrencies. This means, the world’s biggest market players are aware of the fact that the news is fake, and it’s designed to trigger a market crash and buy the assets cheap in order to resell them later when the market recovers, which is something that’s going to happen soon.
At this point, the market panic is in full swing, Market Leader reports. Bitcoin keeps on going down. At this point, Bitcoin is trading around $3953. This is 21% down relative to the all-time high set on September 2nd.
Market Leader experts share Mr. Krymov’s opinion. There is no reason to panic right now.
Earlier this year, he explained that if such a big financial regulator tried to ban cryptocurrencies, they would definitely go underground. Yet, China has a lot to lose in this case. According to the research conducted by Bloomberg, as of mid-summer, there were 65 successful ICOs completed in China. As the result of these ICOs, Chinese companies allocated around $400 million. Whatever they say, there is a shadow economy in China, and it’s really huge. Take Hong Kong as an example, where the People’s Bank of China still has no absolute power to manage the local financial and banking system.
Most probably, what we can see is the Chinese government’s attempt to take the perspective market under control. Whatever the ban is, it’s going to be canceled soon. However, the trading will be resumed with tougher conditions – specialized trading platforms approved by the government and strict regulation, with checking each and every transaction.
And one more thing. The People’s Bank of China didn’t mention specific names like Bitcoin or Ethereum. Does it mean that the existing cryptocurrencies are safe but there is no need to create new ones? Well, that remains to be seen…
