China is the only Ethereum news that matters today, as crypto markets continue to reel from a Chinese crackdown on local exchanges. The entire crypto market is under siege.
Ethereum to USD prices are down about 20.85% and Ethereum to Bitcoin prices dropped roughly 3.1%, suggesting that investors are coalescing around the market leader in times of uncertainty.
With ETH prices touching a two-month low at $201.62, many are wondering when the pain will stop. The truth is, there might be more pain to come.
Two of China’s largest cryptocurrency exchanges have not yet shut their doors. Most of the small ones did so the minute they received verbal marching orders from Shanghai’s Municipal Finance Service Office. But the big ones were waiting it out.
Then they too started to crumble. BTCC and ViaBTC announced that operations would cease by the end of September in accordance with regulatory requests. But Huobi and OKCoin, two of the largest exchanges, are still functioning.
Rumor has it that they’re meeting with Chinese regulators this afternoon. The outcome of that meeting is incredibly important to our Ethereum price prediction.
If Huobi and OKCoin emerge from the meeting unscathed, it will confirm suspicions that China is not permanently closing all exchanges, just that it is whittling down the number of exchanges to a manageable amount.
It may also be “suspending” operations, rather than “shutting down” operations, until tighter oversight is implemented.
Considering that Huobi and OKCoin account for a combined 11% of Ethereum’s trading volume, the closure of those two exchanges would cost ETH another double-digit loss. Then comes the fear-based sell-off, in which no one wants to be the last one off a sinking ship.
In other words, there is tremendous downside risk to Ethereum right now. But, all things considered, I am not bearish on its long-term prospects. China may be the biggest market in the world, but it isn’t the only one.
It should be noted that China banned (and continues to ban) Google, yet GOOGL stock is doing just fine. There are other markets in the world, many of whom are friendly to cryptocurrencies.
So, while the loss of China is a harsh blow to our Ethereum price prediction, it is far from fatal.
Also Read: Hold on to Ethereum for the Long Term