ETH prices fell roughly 11.36% in the last 24 hours to near $238.72. At the same time, the Ethereum to Bitcoin exchange rate dropped almost 5.44%.
The biggest piece of Ethereum news today is the potential Chinese crackdown on cryptocurrency exchanges. Well, that and the recent comments from Jamie Dimon, CEO of JPMorgan Chase & Co. (NYSE:JPM).
Both of these developments dragged down the short-run Ethereum price forecast, though they failed to incorporate the wider context.
For instance, Dimon said to a room full of bankers that Bitcoin “is a fraud.” He didn’t restrain those remarks to just Bitcoin, either, adding that anyone invested in cryptocurrencies is “stupid.” (Source: “JAMIE DIMON: Bitcoin is a fraud that’s ‘worse than tulip bulbs’,” Business Insider, September 12, 2017.)
Here’s the wider context: JPMorgan poured millions of dollars into its own blockchain, called “Quorum.” Also, JPMorgan is officially a member of the Ethereum Enterprise Alliance, a group of major corporations working with Ethereum.
In other words, Dimon might have ulterior motives for raking cryptocurrencies through the mud.
As for the China development, that comes with significantly more teeth. A report from the National Internet Finance Association (NIFA) basically disavowed the entire cryptocurrency market, saying they might be illegal under Chinese law.
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“Any trading platform for any kind of so-called ‘coin’ has no legal base of foundation in China,” read the report [emphasis added]. (Source: “Bitcoin Exchanges Lack Legal Foundation, China Internet Finance Association Says,” CoinDesk, September 13, 2017.)
A few weeks ago, NIFA had similar criticisms about initial coin offerings (ICOs), and that report was swiftly followed by a nation-wide ban on ICOs. As a result, this report is cementing investor fears that China will close its cryptocurrency exchanges.
It’s already starting to happen.
Smaller exchanges are shutting their doors citing “regulatory concerns.” Some of the bigger ones, like Huobi and OKCoin, are still waiting for an official statement, if and when that comes down from Beijing.
While the largest share of Ethereum trading comes from the U.S., China does play a significant role in the currency’s trading activity. Both OKCoin and Huobi are in the top 10 ETH exchanges.
As a result, an official ban on cryptocurrency trading in China would dramatically reduce the short-run Ethereum price forecast.
Also Read: Hold on to Ethereum for the Long Term