In this edition, we go over some of the reasons behind the continued downtrend of bitcoin, how the ICO market is both slowing and growing at the same time, and mention a few novel use case scenarios of novel applications of blockchain technology.

BTC Faces Strongest Trials, Headwinds of the Year

September has been a particularly rough month for bitcoin, with prices varying between just over $3000 to just under $5000 across the last two weeks. Sept 14th was a particularly volatile day for bitcoin as one of the world’s largest bitcoin exchanges, BTCC, announced its closure at the end of September on the behest of the Chinese Government. China also recently announced plans to ban their citizens from launching IPOs as a response to a People’s Bank of China study which revealed that up to 90% of ICOs launched in the country were fraudulent.

The regulatory clampdown by the government of the biggest bitcoin market in the world is blamed for causing the recent drama in the price of BTC, though massive sell-offs have been stifled by a steady stream of big money investors looking to buy in under the $4000 mark. Another probable reason for bitcoin’s inability to sustain the massive momentum of the last 6 months is that plenty of early investors are cashing out now with 250% – 1000%+ gains. Given the uncertain nature of how governments will treat bitcoin going forward, investors that were one step ahead of the Wall Street wave can’t be blamed for locking in such massive profits.

JPMorgan’s Jamie Dimon: Bitcoin is a Fraud

Though hardly the first Wall Street personality to offer sharp criticism of bitcoin, CEO Jamie Dimon’s recent negative statements about bitcoin aren’t helping bitcoin’s recovery. While at an investor conference in New York, Dimon chimed in with words similarly echoed by his banking executive colleagues, calling bitcoin a “fraud” and only suitable for murderers and drug dealers. Though Dimon’s words were strong enough to throw off the price of bitcoin by almost 3% during the day’s trading, it should be noted that he also made the distinction between bitcoin and blockchain technology, which he admits may one day transform the banking industry.

Dimon’s bombshell announcement added fuel to a short-lived panic that saw the price of bitcoin dip down below $3000 on certain markets. As the market quickly recovered some 20% in 3 days, at least one thing was definitively proven: the demand for bitcoin remains strong. Not all analysts and bitcoin enthusiasts see Dimon’s remarks as a negative thing; there are those who believe his words signify bitcoin’s arrival as true competition to traditional systems of financial governance. Perhaps bitcoin and the blockchain’s recent explosion into the mainstream is now a threat to the dominance of the big bangs, and the “elephant in the room” that is cryptocurrency needs to be addressed.

No Slowdown in ICO Race

Despite recent shutdowns and rulings by China, the amount of blockchain startups is flourishing at an ever-astonishing rate. The use of blockchain technology is constantly being explored for business use scenarios in an ever-growing array of industries worldwide. Without similar deterrence as exhibited by China, the rate of ICOs is likely to increase in the more bitcoin-friendly countries. Perhaps across time, the system will find a way to govern itself, but until it does, expect there to be increasing pressure on government officials to develop legislation regarding the legality of the ICO.

How mainstream is cryptocurrency and ICOs in 2017? Very, if you go by celebrity investors and endorsements. Professional boxer Floyd Mayweather recently sported a picture of himself on Twitter holding a bitcoin debit card. Late last month, capitalizing on the flurry of attention from his soon-to-be bout with Connor McGregor, he tweeted an advertisement for an ICO. He is one of many celebrities hired by digital media advertising groups to put faces on the largely mysterious world of cryptocurrency. Other notable endorsements this year come from Mark Cuban, Paris Hilton, and interestingly Vladimir Putin, who walked away with an overwhelmingly positive sentiment for cryptocurrency after sitting down with Ethereum creator Vitalik Buterin earlier this year.

Also in the News

  • Thailand is also among the countries seeking to reform the ICO process while clamping down on potential fraud and abuse. The Thai government has generally welcomed blockchain technology and is looking for ways to employ it in government and federal-scale operations.
  • Among use case scenarios that new ICOs are presenting in order to excite investors is the tokenization of assets, which can theoretically include anything worth tokenizing, from luxury products, to real estate, to gold. Instead of buying tokens that represent shares in a cryptocurrency, the price of asset-based token fluctuates with the dollar value of the underlying asset, which sounds reasonable, in theory.
  • Other recent ICO ideas that have managed to gain media coverage over the last week include finding blockchain-based solutions for counterfeit prevention, aviation record management, digital identity protection and crowdfunding, lending credence to the idea that the ICO market has not been largely effected by China’s recent ICO rulings.