As the dust settles from China’s crackdown on cryptocurrencies, Ethereum looks poised for a rally that could send it across the $300.00 level. However, the situation remains tenuous.
The Chinese ban confirmed the worst fears of some investors—that central banks and other vested interests will regulate against cryptocurrencies to keep their hold on power.
It’s not an unreasonable fear, but I should add that regulators only banned yuan to crypto exchanges, not the existence of blockchain itself. That may sound like a difference without a distinction, but it could be important later on.
It means that Chinese developers can still be awarded ETH tokens, use those tokens for crypto-to-crypto transactions, and develop smart contracts and decentralized applications.
So the bulk of their contribution is intact. They’re still very much in the game.
Sure, we lose some portion of future inflows from fiat money, but that is not as devastating as everyone seems to think. It isn’t even the most important Ethereum news today.
That title goes to the Byzantium fork, which was activated earlier today as block 1,700,000 was mined. It was a major milestone on Ethereum’s development roadmap.
In fact, the Byzantium fork is much more important to the long-run Ethereum price forecast, because it boosts efficiency and speed as Ethereum approaches scale. And yet investors greeted it with a giant shrug.
The Ethereum to USD exchange rate barely moved in response, climbing just 0.17% to around $287.50.
At the time of writing, BTC dominance is near 48.2% and the overall market cap of cryptocurrencies is roughly $136.58 billion.
We expect a delayed reaction to the Byzantium fork, though it will only happen if there is a non-related catalyst at first. For instance, let’s say China’s crackdown starts to get smaller in the rearview mirror and Bitcoin simultaneously passes $4,000.
Wouldn’t that spark a bullish rally in ETH? It almost certainly would, which would then put ETH back on track to reach our $1,000 Ethereum price forecast. Volatility aside, we believe this will be the sweeping arc of Ethereum prices in the next 12 month.
Also Read: Hold on to Ethereum for the Long Term