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With the Trump administration making a push to stop Chinese companies from investing in U.S. tech companies, many investors are wondering where the money will now flow. What’s more, the ban is not exclusive to China: the U.S. is planning on banning investment from any country where it deems its IP to be under threat.
News of the ban sent many tech stocks plunging, with Micron Technology dropping almost 7%. The semiconductor space led the tech sell-off as the trade war uncertainty and investment ban news intensified. Cryptocurrencies, meanwhile, may have caught a break as many Altcoins posted double-digit percentage gains. Perhaps money that would once go into U.S. equities will now make its way into the cryptocurrency market, including ICOs.
China and other nations affected by the U.S. ban may now see the cryptocurrency market as an attractive alternative tech investment. China has been quick to support the development and use of crypto assets that emerge domestically and work closely with its government. China is home to NEO, the seventh largest cryptocurrency that is currently trading near $32, down well over 50% from its all-time high of just over $162. It is known that China and the United States are competing tirelessly to become the leader in technology: perhaps cryptocurrency innovation is the vehicle that will give China the upper hand.
Many new crypto projects are emerging from China and – interestingly - many of them have very close ties to the Chinese government. This could be China’s strategy to promote and support crypto projects that are built at home. For example, THEKEY is an identity verification crypto project that works closely with the Chinese government and is built on the NEO platform. China is making a push to work with THEKEY on research of blockchain applications in social security services.
This is huge news: A push by a major government to use blockchain to improve and eventually replace an existing system for data identification and collection. THEKEY is currently trading for $0.008415, has an overall market capitalization of $39,590,000 and is currently listed on small exchanges such as Kucoin and HitBTC. When the project gets more attention and is listed on larger exchanges and it gains the consequent increase in volume, we could see a significant price surge.
Another prominent Chinese crypto – NEO – is seen as "the Chinese Ethereum," and the success of Ethereum came due to the large number of ICOs launched using the platform. As the U.S. tries to push China out of the competition, NEO seems to present itself as a savior for Chinese technology innovation. If ICOs begin to launch on the NEO platform at a similar rate to that of the Ethereum platform during 2017; it is possible that NEO can overtake some of the largest cryptocurrencies and be a top choice for developers that wish to build applications on the blockchain.
This would mean driving a Chinese protocol to the forefront of the cryptocurrency ecosystem along with Ethereum and EOS. After all, China’s government-backed crypto rankings recently put EOS at the top spot. China may be able to get around U.S. obstacles by investing time and money into becoming a leading crypto and blockchain-backed nation - yet another reason to be long-term bullish.
