- China rattled the cryptocurrency ecosystem with the latest announcement to preclude banks and financial institutions from offering cryptocurrency services.
- The aftermath of this declaration led to the massive tumbling down of prices as several coins shed a substantial part of their market value.
- Coins that have ties to China like NEO, Theta, VeChain and, TRON were part of the cryptos that were hardest hit after the announcement.
- The fate of these cryptos is looking optimistic following the recent turnaround of the prices and the perception of China’s recent declaration as more ‘bark’, less ‘bite’.
The last seven days have been eventful for cryptocurrencies as the market felt the tremors of China’s announcement that it would be stopping banks and financial institutions from participating in cryptocurrency transactions. This announcement triggered a massive sell-off, leading to the wiping off of over $500 billion of the global cryptocurrency market capitalization.
Most profoundly, the fate of coins tracing their origin to China hung in the balance following the recent announcement as their values plummeted sharply. However, a reversal in price trends and the market perception from retail traders and some firms have shown that there is light at the end of the tunnel for these projects.
NEO, THETA, VeChain, and Tron – Chinese Links
Following the announcement by Chinese authorities, Neo fell sharply by as much as 40% while THETA lost over 35% of its market value to trade at $41.37 and $3.98 respectively. NEO has strong links to China and is fondly referred to as China’s first-ever blockchain project after it was launched in 2014.
NEO was founded by Da Hongfei and Erik Zhang who are Chinese nationals while THETA’s co-founder Steve Chen is a Chinese-American.
VeChain also felt the impact of the bearish news as the value of the coin nosedived by over 30% to trade at $0.06594 while TRON lost 35% of its value to trade at $0.5573. TRON has garnered significant popularity in China earning the accolade of the “new Bitcoin of China”.
With a Chinese CEO, Justin Sun, and the fact that China is a potential market for TRON as it has a healthy number of content creators, the impact of the announcement hit hard. Similarly, VeChain’s root in China runs deep as it was among the first companies authorized by China to serve as registered blockchain providers and has also been deployed by Walmart China to track products through the blockchain.
On the Flipside
The Fate of the Projects
As the news of the announcement triggered a massive dip, recent events have shown a ray of hope for these projects. Firstly, the value of the coins has risen significantly since the downtrend.
A reason for this rise in values has been linked to the fact that the stance of Chinese regulatory authorities may be regarded as ‘all bark and no bite’, following previous announcements banning cryptocurrencies. Furthermore, the decentralized nature of cryptocurrencies puts the assets beyond the reach of any government or third-party interventions.