If you have been following the Chinese ICO market recently then you may have heard the news that the Chinese regulators are considering a number of laws that would apply to the industry.
This led many investors to speculate that the price of NEO, “China's Ethereum”, would fall due to lack of ICO demand. The price has indeed come off a bit from recent highs as concern begins to take over the market.
Yet, there is another argument that takes a more favourable look at the regulations and the potential impact these may have. According to someone who made a post on the NEO subreddit, these regulations could have a long term positive impact on market confidence and hence boost the price of
NEO.
This is indeed a reasonable assumption to make. There are many investors in China who would like to take part in an ICO but are extremely cautious on concerns that they could be a scam. Once regulators are able to lay out certain rules that need to be met then these investors will have more confidence to enter the ICO market.
A Cleaner ICO Market
There were a number of comments around the current lack of regulations of ICOs in the Ether network and how some startups were able to raise millions of dollars with mere 2 page white papers and an idea. There is a certain degree of merit in the notion that someone should only be raising money if they have some working product.
This also ties in with the cultural differences between investors in China and those in the USA. According to one comment on the thread
Although many western investors hold “Caveat Emptor” as a guiding principle, the Chinese are much more pragmatic in their approach to finance. They expect clear and honest dealings with firm consequences attached to those who deviate from the status quo
How NEO will react over the next few months is not really clear. However, one cannot deny the implications of a population of over 1bn people suddenly being able to invest in the latest blockchain technology. This is indeed true for the entire cryptocurrency market in general.
Although China makes up the bulk of the trading for Bitcoin for example, the per capita Cryptocoin adoption rate in China is still marginal. Once a path is opened for all these traders we are bound to see a massive shift.
