China Clamping Down On Cryptocurrency, Causes BTC Price To Drop

It seems China is finally doing to cryptocurrency what it does to everything else; enforce rigorous control. Chinese authorities are now clamping down on the emergence of new digital currencies, preventing new initial coin offerings (ICO). This resulted in damages to Bitcoin’s (BTC) price, which had previously surpassed $5,000.

As of writing, BTC’s price stands at $4,126. This this is a steep drop from today’s high of $4,456 and the $5,013 seen on September 1st. While it’s generally accepted that the cryptocurrency market is volatile by nature, it really wasn’t aided by China’s decision to bring out its regulation guns.

BTC wasn’t the only coin that lost value because of the Chinese government’s interference either. Ethereum, Litecoin, and BitConnect all saw price drops after the regulations started kicking in, Forbes reports.

This series of bad news in cryptoworld can be traced to the decision made by the SEC, which ruled that ICOs are to be considered investments. As a result, they should be treated like every other stock in the market. China isn’t alone in this endeavor either. Both the US and Russia are already taking steps to clamp down on cryptocurrency.

As for what justification regulators have given for their heavy-handed approach, the familiar scapegoat called “public safety” is in the lead. Investigations are now underway to look into the ties of criminal organizations with Bitcoin and other digital currencies.

Of course, financial experts have their own hypotheses, which involve governments wanting to maintain their monopoly on money printing. The bigger cryptocurrencies get, the less power governments have when manipulating the Yuan or the Dollar.

There are those who view regulations as a good thing, however. One contributor for CNBC noted that what China is doing will ultimately be good for the crypto market because it will lead to “a new gold standard of ICOs.”