On 18th May 2021, the Chinese government banned payment companies and financial institutions from providing any services related to cryptocurrency transactions. While China has banned cryptocurrency exchanges, initial coin offerings (ICO), and all other service providers that offer crypto-related transactions, individuals are not barred from holding cryptocurrencies.
The fact that cryptocurrencies do not have a central governing body does not sit well with the Chinese government, as it is nearly impossible to trace and keep track of crypto transactions and individual holdings. That said, China is not against cryptocurrencies, just the lack of control they have over the global market and the potential impact it could have on their economy.
The Chinese government is exploring the use cases of the Digital Yuan, China’s version of CBDC, and has already integrated the cryptocurrency into the subway system.
Following China’s announcement, the global crypto market suffered immensely as the prices of popular cryptocurrencies like Bitcoin and Ethereum fell considerably. While the crypto market has recovered since then, largely due to the B Word Conference and the Ethereum London hard fork, Chinese approved VET and NEO now look on shaky ground as investments.
Should You Invest in VET and NEO?
It is no secret that VET and NEO are fantastic projects that are worth investing in. Given China’s stance on cryptocurrencies though, VET and NEO admirers are in an awkward position.
The question to be addressed here is simple – do you invest in the potential of these cryptocurrencies irrespective of their link to China or do you factor in China’s role in the market’s collapse between May and June and refrain from investing in these cryptocurrencies? The answer is simple – invest in the potential of these projects.
VeChain and Neo must not suffer due to the decisions taken by the Chinese government. While the Chinese cannot invest and transact in these cryptocurrencies and beyond, the potential use cases of VET and NEO make them worthy investments.
VeChain is a one-of-a-kind blockchain-powered supply chain platform and is well-respected. Neo is a blockchain ecosystem that aspires to become the very foundation of the next generation of the internet. VET and NEO suffered greatly following China’s announcement, falling more than half in value within a week.
Following the B Word Conference and the Ethereum hard fork, VET recovered from under $0.06 on 21st July to $0.12 (at the time of writing) and NEO soared from under $26 to $55.47 (at the time of writing). It is clear to see investors are once again showing their faith in these projects irrespective of their Chinese links.
That said, this could be a classic case of the fear of missing out (FOMO) coming into play. Follow the movements of these cryptocurrencies with a keen eye and invest accordingly. In my opinion, their origin should not matter, as their applications bode well for the crypto community at large.