Mason Baxter: China Ban on ICOs Sinks Crypto Currencies
Mason Baxter Chinese authorities clamp down on Initial Coin Offerings as fears grow over lax regulation.
SHANGHAI, September 10, 2017 (Newswire.com) - Prices for cryptocurrencies like Bitcoin and Ethereum fell sharply earlier this week after Chinese authorities including the People’s Bank of China (PBoC) moved to outlaw ICO or initial coin offerings. Driven by growing interest in cryptocurrencies, ICOs have become a popular way or startup companies to raise funding.
Virtual or cryptocurrencies like Bitcoin have enjoyed fantastic performance this year with the price for the best-known currency exceeding USD 5,000 this year. BTC has fallen by 20% this week and many commentators are cautioning investors that the decline could be the “beginning of the end” for the bubble in cryptocurrencies.
Technology analysts at Shanghai-based broker dealer, Mason Baxter say they welcome the development and insist that the banning of initial coin offerings is not indicative of a broader-based game plan to curb the proliferation of digital currencies.
Similar to crowd-funding, initial coin offerings revolve around a firm or startup that is typically associated with the digital currency space. The firm then issues tokens that can be bought with a cryptocurrency and, at a later date, be exchanged for goods or services.
According to Mason Baxter, the crackdown on initial coin offerings will help prevent unsophisticated retail investors over exposing themselves to the risks associated with this type of funding. The firm says that, while there is upside potential remaining in cryptocurrencies, it is still telling clients to be wary and to remember that very few retailers actually accept cryptocurrencies as legal tender. They warn that they are behaving more like risk assets than currencies.
Source: Mason Baxter