After falling for most of the week like a stone, Bitcoin, the “people’s currency,” made a sharp turn upwards on Friday and early Saturday morning, gaining close to 12 percent within 24 hours.
Other cryptocurrencies followed suit. Ethereum also gained close to 12 percent, while Litecoin fared even better gaining close to 19 percent.
|Coin||% 24H||% 7d|
*As of Saturday September 16, 2017 at 9 pm
That should come as a relief to cryptocurrency investors, especially to those who purchased at much higher price than the current levels, before China shut Initial Coin Offerings (ICO). But is the worst over? Can cryptocurrencies reach $5000 again without China?
Stelian Balta, Founder and Managing Partner of HyperChain Capital, thinks so.
“If we look at Bitcoin or Ethereum from a technology perspective, the bad news is not entirely relevant. Miners will continue to mine and developers will continue to create great code and projects. Digital assets are a global phenomenon and the ecosystem is in its early days.”
Balta further argues that cryptocurrencies can survive and thrive without China. “I am very optimistic regarding the global digital assets market,” he says.“Digital assets can be considered commodities trading on supply and demand. There is fixed supply and increasing demand. China is an important market and the recent news of exchanges shutting down and ICO funding being banned certainly has a short term negative effect on the prices. However, digital assets are a global phenomenon. Huge Internet businesses like Facebook or Google are banned in China and are doing pretty well.”
That isn’t completely accurate. While Bitcoin supply is fixed, there are competing cryptocurrencies that proliferate like mushrooms, providing investors more choice. And comparing digital assets with Facebook and Google is like comparing apples and oranges.
While only time will tell for sure which way Bitcoin and other cryptocurrency prices will head, one thing is clear: Bitcoin’s buzz is gone, for now. It was crushed by the heavy-handed intervention of the Chinese government, which is depressing demand for the digital assets, as discussed in a previous piece here.
By Panos Mourdoukoutas