Bitcoin price takes a hit as China, one of the most influential Bitcoin markets, faces bans on all ICO campaigns from its central bank. Only several days after the price set out on a fast climb beyond $4,500 on the back of uncertainty surrounding the North Korea missile crisis, it took a plunge this Monday as the PBOC (People’s Bank of China) announced a halt to all ICOs (Initial Coin Offerings). But luckily, after losing somewhere near $400 it has since recovered thanks to increased buying pressure.
Another news update from this week that seems to be a big buzz in the Bitcoin community is Quartz’s interview with the highly-cited Nobel-prize winner Robert Schiller – an economics professor with a specialty in bubbles. Scheller, who was interviewed by the media portal on Bitcoin, said the cryptocurrency is the best example of a bubble we have right now.
But while bubble talks are nothing new, the real interesting opinion Scheller offers is his reasoning why Bitcoin has become so popular. Namely, he believes it is“angst” with the digital world and computers that drives people to Bitcoin as they reportedly feel insecure about their future both financially and professionally, which makes Bitcoin an empowerment tool that gives them the feeling they understand what’s going on and can earn from that understanding.
Bitcoin Price Back Up
During the past week since our last update, the price of Bitcoin went through major changes, hitting a peak on Saturday of $4962.43, only to drop down three days later to $4040.30. But after the news from China started to settle, Bitcoin again climbed up to the $4,400 range where it currently sits.
Unsurprisingly, the panic pushed trading volume to dizzying heights, at one point even reaching $3 billion when the price was at its lowest. But things are looking more “normal” now, with the trading volume at $2.4 billion and the market cap sitting at $74.3 billion.
Our technical analysis shows that the market is again in a predominantly buying mood, with 8 out of 12 technical oscillators and 11 out of 12 moving averages sending a buying signal on a 5-hour time-frame. The SMA 100 is still above the SMA 200, showing less resistance to the upside. However, although the overall signal looks positive, you should definitely keep an eye on any major geopolitical events, especially in Asia which is undoubtedly quite influential to Bitcoin’s price.
ICOs No More Says PBOC
In a joint statement from the PBOC, the financial regulatory authority, and other governmental bodies in China, the central bank of the People’s Republic announced the ban on all Initial Coin Offerings, proclaiming them illegal from now on. Not long after the prohibition was announced, Bitcoin’s price came tumbling down sharply.
ICO Campaigns are crowd-funding campaigns startups use to raise funds by issuing their own cryptocurrency tokens instead of stocks. The tokens are sold for other digital currencies like Bitcoin, or Ether, and they are expected to rise in value over time. According to Bloomberg, over the past year alone ICO campaigns have helped startups raise over $1.6 billion in funding.
However, the Chinese authorities have decided to ban all ICOs for the time being, as they prepare to analyze them more deeply. The PBOC also urged all businesses and individuals in China that have raised money to return funds to the investors while warning them that there will be a scrutiny over their completed campaigns to determine any legal violations, which will be penalized. For how long the ban will last remains to be seen.