Investing.com – Bitcoin traded higher on Tuesday but remained well below its recent peak as market participants continued to assess the fallout from China’s decision to ban individuals and organizations from raising funds through initial coin offerings (ICOs).
On the U.S.-based Bitfinex exchange, bitcoin rose to $4,386, up $185.6 or 4.42%, but lagged its recent peak of $4,911.80. At current prices Bitcoin boasts a market cap of $72.42 billion.
The People’s Bank of China said on its website Monday that it had completed investigations into ICOs, and will strictly punish offerings in the future while penalizing legal violations in ones already completed.
Individuals and organizations that have completed ICO fundraisings should make arrangements to return funds, said a joint statement from the People’s Bank of China (PBOC), the securities and banking regulators and other government departments that was posted on the central bank’s website.
An initial coin offering (ICO) is a used as a means of fundraising via the use of cryptocurrency in which a company attracts investors by releasing its own digital currency which can appreciate in value if the business is successful.
The Chinese government’s latest measures to curb the activity of initial coin offerings are seen as a threat to the strong demand that currently supports cryptocurrency growth. Ethereum, in particular, is widely believed to one of the main cryptocurrencies at risk of suffering from a dip in demand, as ICO issuers often request payment in ether – a currency transacted through the Ethereum network.
Ethereum, traded 7.43% to $317.69 while Bitcoin Cash rose $36.10, or 6.96%, to $555.08.
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