ICOs just became harder to reach for Chinese investors. The short government statement issued yesterday (translated by Coindesk) defined ICOs as illegal and put a halt on token trading:
“ICO financing refers to the activity of an entity raising virtual currencies, such as bitcoin or ethereum, through illegally selling and distributing tokens. In essence, it is a kind of non-approved illegal open fund raising behavior, suspected of illegal sale tokens, illegal securities issuance and illegal fund-raising, financial fraud, pyramid schemes and other criminal activities.”
The non-regulated cryptocurrency sector has recently seen an escalation in global attempts to restrict investments. Recent news serve as an indication of things to come. It it a matter of time before other countries start treating cryptocurrencies as financial instruments, which will reduce the wave of new ICOs.
Rhea (RHT)is one of the many upcoming ICOs, which will be influenced by the Chinese ban on token trading. How will those interested in contributing to Rhea be affected? There are three reasons why Rhea contributors (in case you missed it here is the WhitePaper) will be better off when such announcements are made in the present or future.
1. ICOs just became more exclusive
As more regulations are introduced worldwide, it will become progressively harder for people to invest in ICOs. As 2018 approaches, it is expected that more countries will classify tokens as financial instruments, thus drastically reducing the number of new ICOs. Therefore, the 15 weeks remaining in 2017 represent a closing window of opportunity for crypto-enthusiasts to become part of a token sale. As Rhea’s ICO starts on October 2nd, new developments should not affect the investment process or the outcome.
2. All news provide opportunities
Once the options platform is operational, Rhea users will be able to profit from similar announcements, instead of watching the mark-to-market of their cryptoassets free fall. All news bring volatility to the market, especially negative ones. At the moment, investors in cryptocurrencies have very limited possibilities when it comes to hedging or opening a short position. Trading options on a crypto-index will expand the number of actions people will have to choose from, especially when it comes to speculating.
3. Higher volatility — higher dividend
As Rhea tokens will distribute a quarterly dividend based on collected transaction fees, higher trading activity will result in a higher nominal return. Major news will increase volatility, thus giving a greater reward to token holders. The dividend will serve as a hedge against sharp declines in cryptocurrency values, because losses from one cryptocurrency will be at least partially offset.
It has never been easier to invest in cryptocurrencies, but all good things come to end. Regulations are bound to shape shift new ICOs and make them subject to a multitude of restrictions. Those still hesitant should stop thinking twice and become a part of the cryptocurrency trend while the window is still open. The time to invest in ICOs is now!
