China, which completely banned initial coin offerings (ICOs) back in September and later banned all domestic cryptocurrency exchanges to operate in the country, is now going after the Asian exchanges working outside the mainland.
According to the Chinese media, major exchanges like Binance and Bittrex, which operate from Hong Kong, were rendered completely inaccessible to Chinese investors on Friday. Earlier this week, investors also faced firewalls on their social media apps like “WeChat” that prevented them from gaining indirect access to exchanges. (Source: “China Blocks Cryptocurrency Exchanges Following Major Security Breach At Binance,” China Money Network, March 9, 2018.)
To make matters worse, the governor of China’s central bank also took a direct aim at cryptocurrencies on the same day. The governor made it crystal clear that the government doesn’t like any such crypto that gives investors an opportunity to speculate or an illusion to strike overnight riches.
According to the governor, these include “lots of cryptocurrencies” that have delivered “explosive growth” in a short frame of time. (Source: “PBoC Governor Blasts ‘Explosive’ Cryptocurrency Speculation,” CoinDesk, March 9, 2018.)
You may read it on a more positive note that the Chinese government is not against all cryptocurrencies, only ones that are speculative. But wait, which crypto isn’t speculative? Every crypto has seen this “explosive growth” through the December bull run.
The harsh reality is that nearly all cryptos fall into this category of speculative investments, making virtually all of them unfavorable in the eyes of the Chinese government. Keeping the given context in mind, it’s not too difficult to fathom why the market is overreacting.
The LTC price took a deep plunge in the aftermath of these newly imposed firewalls. Prices plummeted more than 10% within hours, with the LTC to USD rate crashing below $160.00. Prices are recovering now, possibly as the Westerners wake up to see their coins selling at bargain prices and begin to buy the dip.
As of now, Litecoin trading volumes are showing the most strength on Korean exchange OKEx and U.S. exchange GDAX.
This is the second major crash over the course of two months. Both times, regulators in the Asian markets triggered it. Since the Asian markets drive nearly two-thirds of the trades in cryptocurrencies, we don’t expect this volatility to end anytime soon. Governments will possibly continue to dilly-dally on regulations, forcing prices to endure more fluctuations. It’s best to avoid checking prices on a daily basis and instead focus on the long term.
Our long-term Litecoin price forecast is bullish as we maintain our focus on Litecoin’s fundamentals. We’re targeting a LTC price of $400.00 for 2018