Bitcoin prices were hit by a significant downdraft in the wake of news Monday that Chinese regulators have put in place a ban on initial coin offerings, known as ICOs.
The price of the digital currency slipped by more than $200, to $4,350 after the announcement. Pricing rebounded a bit, to about $4,350 in trading in Europe on Monday.
CNBC said that the regulatory push is the latest in a series of events where Chinese regulators have tried to, as the newswire said, “crack down” on the cryptocurrency arena, which of course has variants other than bitcoin. Early this year, the Chinese government had said that some exchanges listing and trading the currencies would be shuttered if there were findings that they had breached laws governing money laundering.
As has been widely reported, ICOs help companies raise funding through the sale of newer cryptocurrencies. The Chinese government said on Monday that such fundraising is in fact illegal.
One observer told CNBC that the bitcoin slip would not have much in the way of legs. The trend for the digital currency’s pricing has been to the downside. Fran Strajnar, CEO of data firm Brave New Coin, termed the news emanating from China as “‘universally’ negative sentiment, within the crypto space, so we are not surprised to see a dip on all assets today,” Strajnar said. Those comments to CNBC came through email, CNBC noted.
Separately, the site said that Charles Hayter, CEO of the website CryptoCompare.com said that “a rising tide lifts all boats, but the opposite is also true – with generally bad news reverberating across the ecosystem all cryptos have turned red together,” adding that “the wheat will be sorted from the chaff and a new gold standard of ICOs can be striven for.”
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