Kelvin Lu
Kelvin Lu
Jul 24, 2017 · 2 min read

Due to the nature of blockchain technology, it is virtually impossible to “disappear”. As an entity distributed globally no one person or organization can shut down Bitcoin or Ethereum. However, the SEC could for example, step in and restrict exchanges (Coinbase, Polo, etc.) from allowing the trading of Ethereum due to the way it allows the sale of unlicensed securities. This could cause panic selling, but the underlying digital assets will always be there in the blockchain no matter what happens though the market could quickly disappear. For any given coin or token the price will always be determined by the market and for now exchanges are still highly regulated by governments, which can trigger panic selling due to regulatory enforcement.

In the event of restricted local access, you may need to go to another country to exchange your coins/tokens and even then, banking or money laundering rules may restrict you. Ethereum’s fundamental flaw is that it enables the creation of unregulated securities and the correspondent ease of overinflating asset values could lead to panic selling and major losses.

The pathway Vinny suggests for cryptos to become uncorrelated is still completely hypothetical given the current lack of self-regulation. Charles Hoskinson, co-founder of Ethereum, thinks Ethereum is a “ticking time bomb” due to the dangerous overvaluation of ICOs with little to no assets or intellectual property. Even “responsible” token sales can be complicit in this problem as panic selling related to one ICO might trigger panic selling all across the board as investors begin to seriously examine what they’ve bought and rush to liquidate into fiat currencies.

    Kelvin Lu

    Written by

    Kelvin Lu