Bitcoin Value Plummets Following BTC China Shutdown Announcement
The price of bitcoin took a significant dive Thursday morning following the announcement of a major Hong Kong-based cryptocurrency exchange. BTC China said it would close its doors on September 30, citing new rules from Chinese regulators.
2017 has so far been a whirlwind year for cryptocurrencies. Earlier this this year, Ethereum gained international notoriety following a runaway increase in value that triggered a frantic GPU purchasing spree that left the PC gaming world reeling over graphics card availability and rampant price increases.
While Ethereum miners enjoyed massive gains from their mining operations, cryptocurrency traders also enjoyed wins in their portfolios as the value of the most popular altcoins increased alongside Ethereum. The value of Bitcoin, the granddaddy of all cryptocurrency, also shot up significantly this year. One year ago, Bitcoin was trading for around $600. On September 1, 2017, Bitcoin peaked at just shy of $5,000 per unit.
Things were looking up for Bitcoin traders for most of 2017, but as they say, all good things come to an end. On September 2, Chinese regulatory authorities announced that initial coin offerings (ICOs) are considered illegal, and the country banned projects that receive funding through the practice.
The news of China’s crackdown on cryptocurrency fundraising didn’t immediately cause a panic, but it put the China-based cryptocurrency exchanges on notice, and following “careful consideration,” one of China’s largest exchanges decided to call it quits. BTC China sent a tweet today indicating that the exchange would halt its operations at the end of the month.
The announcement of BTC China left investors scrambling to get their money out before it's too late, which kicked off a rapid plummet of the value of Bitcoin. The currency is currently down more than $550 from yesterday, and it's still trending downward. Ethereum is also taking a big hit, with its value down 16% overnight.
The sudden drop in confidence in cryptocurrencies is further exacerbated by recent comments from a financial industry elite. Jamie Dimon, the current CEO of JPMorgan Chase, recently stated that he believes Bitcoin “is a fraud” and that it would all eventually come crashing down.
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Despite the sudden doom-and-gloom attitude towards Bitcoin, the current crash is likely just a blip in long term outlook for the currency. The dip is largely due to the actions of one exchange that kicked off a panic sell, and not a fundamental flaw in the currency itself. Overall, confidence in cryptocurrencies has been on the rise for years, and people are still likely to be drawn to its potential for rapid gains.
Cryptocurrency is a new market, and governments are still struggling to figure out how to regulate this new store of value. When new rules are put in place, there’s bound to be shakeups. In the end, Bitcoin’s value is tied to confidence that its users place in technology, and there’s no shortage of dreamers that have put their faith cryptocurrency being the future of monetary exchange. For those who believe in Bitcoin’s long-term success, sudden drops in value present a potential buying opportunity. Or this could be the beginning of the end. Who knows?
Kevin Carbotte is a contributing writer for Tom's Hardware who primarily covers VR and AR hardware. He has been writing for us for more than four years.
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Patrick_Bateman Good! The pyramid scheme will hopefully die soon, GPU prices will plummet, power consumption will drop, and coin miners will have to actually produce something or do something to earn money. What's not to like if you're not a miner?Reply -
bloodroses Reply20174326 said:Good! The pyramid scheme will hopefully die soon, GPU prices will plummet, power consumption will drop, and coin miners will have to actually produce something or do something to earn money. What's not to like if you're not a miner?
Amen there. Maybe I'll finally be able to replace my AMD 7770... -
Daekar3 Of course the banks don't like bitcoin - it is ultimately an un-inflatable currency, which means it can't be used as an unlimited cash fountain by loaning to governments.Reply
Cryptocurrency is an objectively better medium of exchange than government fiat money that can be inflated without limits, as we've seen for the past century. -
TJ Hooker Wasn't JPMorgan (while Jaimie Dimon was CEO) a major player in the subprime mortgage crisis? Which was a bubble, and involved a bunch of complicated financial instruments like CDOs and credit default swaps to turn junk securities into something of value? Seems pretty rich for him to be talking about how bitcoin is a bubble with no inherent value...Reply -
TJ Hooker Reply
Nobody has been mining bitcoin on GPUs for years...20174326 said:Good! The pyramid scheme will hopefully die soon, GPU prices will plummet, power consumption will drop
And Eth is going to be switching to proof-of-stake model, which reduces the need for massive hashing power (and therefore electrical power) like proof of work does. People have been talking about an imminent flood of cheap, used GPUs for at least a couple months now, I haven't seen it. You still have used RX 580s going for MSRP or higher on Ebay.
and coin miners will have to actually produce something or do something to earn money.
IMO, crypto mining is basically an example of capitalism not unlike a small business. You use capitol to purchase the means of production (spend money to buy mining equipment), pay your 'employees' (your electricity bill) to do work, and then pocket the revenue.
What's not to like if you're not a miner?
Because blockchain technology has the potential to revolution finance, and the decline of cryptocurrency could slow it's development and/or adoption? Not because of any flaw in the technology, just because people got scared. -
CalifLove Yes, looking at this from a pure gamers eye pissed off about GPU pricing is really shortsighted...much more at play here people...Reply -
mamasan2000 "...and coin miners will have to actually produce something or do something to earn money."Reply
You could say the exact same thing about anyone owning stocks, diamonds, gold etc. -
King_V Reply20175236 said:"...and coin miners will have to actually produce something or do something to earn money."
You could say the exact same thing about anyone owning stocks, diamonds, gold etc.
I've been known to do so :lol: - as well as to be of the belief that cryptocurrencies seem way too speculative, though one could say the same about various other commodities as well.
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captaincharisma Reply20174375 said:20174326 said:Good! The pyramid scheme will hopefully die soon, GPU prices will plummet, power consumption will drop, and coin miners will have to actually produce something or do something to earn money. What's not to like if you're not a miner?
Amen there. Maybe I'll finally be able to replace my AMD 7770...
im looking to replace my 7770 too with at least a geforce 1060