Trader Note

Forward looking reports in EU will drop market value in negative markets.

China ICO vs BTC ETH

Buy BTC on this fear move lower.

China has decided to ban initial coin offerings, ICOs. This has caused a price drop in Bitcoin (BTC) and Ethereum (ETH). Look at this as a buying opportunity.

China has a massive Bitcoin mining operation. They have funneled funding to this industry in hopes of becoming the primary player in this market. They will NOT be banning BTC or to a lesser extent ETH.

China is targeting dodgy ICOs. If these ICOs must repay investor money, they will likely be doing so in BTC or ETH, not in Yuan cash. Thus, they will need to buy these base cryptos with investor money to repay those same investors. This will also likely happen at a small percentage of initial investment, so it is these speculators that will be hit by this legislation. BTC and ETH will be in high demand by the ICOs in an attempt to pay back these funds.

Many powerful people in China are invested in BTC and the associated mining operations. Powerful investors influence the market more than public pressure, so the future of Bitcoin is secure, regardless of the fear selling.

This fear in the crypto space will primarily effect ICOs and small players in the market. Bitcoin and Ethereum will be driven higher as this capital flees these less robust coin offerings.

Therefore, buy BTC and ETH while the opportunity presents itself.

Refrences:

http://www.zerohedge.com/news/2017-09-04/ethereum-bitcoin-crash-after-china-declares-initial-coin-offerings-illegal

http://www.zerohedge.com/news/2017-09-04/bitcoin-sour-grapes-and-institutional-herd

 

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