NEO Cryptocurrency Suffers as China Bans ICOs
If there’s one thing to be said about the cryptocurrency world, it’s that it can be incredibly fickle. Part of this is due to the unstable nature of the industry. There are new cryptocurrencies and technologies being developed and released all the time, and it’s difficult for just about anyone to predict how the wider landscape of cryptocurrencies will be affected by new emerging trends and investment options. Then, of course, there is the trouble that can be caused by governments and regulatory agencies. Many countries are still sorting out exactly how cryptocurrencies will feature in their investment profiles, and what types of regulatory action they will take. It could be a combination of these factors that has led to NEO’s recent plunge in price.
From “Ethereum of China” to Uncertain Future
The Merkle characterized NEO as the “Ethereum of China.” The altcoin has surged in price over the course of the year, climbing to about $50 per coin. However, in recent days the price has plummeted to $20 or so per coin. While some suggest that this was not too much of a surprise–the altcoin saw a significant value appreciation recently, which would inevitably lead to a correction at some point in the future–there may be other factors at play as well. NEO had maintained a value of about $34 per coin for some time. Instead, now it is suffering from a significant price collapse, although its market cap lingers at just over $1 billion for the time being.
Chinese Government Played a Part?
It’s possible that the recent decision by the government of China to ban all cryptocurrency initial coin offerings (ICOs) has had an impact on the value of NEO. Just last week, Chinese legislators were only considering a widespread ban; now, it seems that it has become a reality. This means that start-ups can no longer raise funds through ICOs, and also that cryptocurrency-affiliated companies are likely to see a great deal more governmental scrutiny going forward.
NEO saw its initial success in large part because of Chinese investment. As Chinese investors are growing skittish about cryptocurrencies in light of the recent news, many may be working liquidate assets quickly. The result seems to be that NEO has plummeted in price, and it’s likely that there will remain a great deal of volatility in the Chinese cryptocurrency market for some time to come, too.
The question, then, is whether this recent price drop is an investment opportunity for those looking to get in on NEO before it climbs in price once again, or if it might be a death knell for the cryptocurrency. The answer to that question remains to be seen, but it’s likely to either entail massive profits or losses for many investors in the process.