Bitcoin which briefly topped $5000 just a couple of weeks ago has dropped in price, but the amount it’s dropped by and why has people concerned.
At the time of this writing, the price of Bitcoin is sitting around $3500, and could possibly drop some more as the news of China putting forth regulations are impacting exchanges. In some cases, Chinese Bitcoin exchanges are closing temporarily until complete regulations are revealed.
It started out as rumors several days ago on the back of China’s ICO ban, that some exchanges may be shutting down completely due to China “banning Bitcoin.” As it turns out, China is not banning Bitcoin and they only banned ICO’s (Initial Coin Offerings). Even if China wanted to completely outlaw Bitcoin, they couldn’t actually stop it. A good example is how they have the Great Firewall of China to block certain types of internet traffic. Those that want to use sites such as Facebook or Google route around the firewall to get to those sites.
The same can be said for Bitcoin, but even on an easier level. If China were to outlaw Bitcoin and all exchanges there shuttered, people could easily trade Bitcoin because it’s a peer-to-peer technology. It’s not centralized and anyone with an internet connection or even a radio frequency can send Bitcoin (digital transactions) to each other outside the purview of the government.
However, in consideration of the ICO ban and some Chinese Bitcoin exchanges running ICO’s on their platform, exchanges such as BTCC (BTC China) are closing on September 30 until the Chinese regulations get ironed out. To make it completely clear, they aren’t closing because a ban on Bitcoin, they are closing because of the ICO regulatory concerns in China due to previous ICO dealings on their platform.
In light of the news, the price has dropped significantly down $1500 from just two weeks ago. To make matters worse this week, Bitcoin took a hit from main stream media when JPMorgan CEO Jamie Dimon said that Bitcoin is a fraud that will eventually collapse; but not first before saying it could go to $100,000.
Unfortunately it doesn’t appear Dimon truly understands Bitcoin. As outlined above, governments such as China can’t stop anyone from using Bitcoin that wants to. Dimon even contradicted himself when he said places such as Venezuela, Ecuador, and North Korea would find Bitcoin very useful, as it is a great way to route around government control and censorship (hence it has value to those that need it).