Prior to this months Chinese “Crypto Crackdown,” NEO founder, Da Hongfei, states he met with government officials to discuss future regulations on the cryptocurrency market.
In an interview with a Dutch Financial publication, Het Financieele Dagblad, Hongfei willingly admitted that regulators went to him for “suggestions” before the People’s Bank of China announced the ICO fundraising ban, and began calling for the complete shutdown of Bitcoin exchanges.
“Before they started cleaning up the market, I was asked for information and suggestions,” Said Hongfei.
Although NEO is a smart contracts platform meant to support the development of decentralized applications, Da strongly supports the recently placed regulations on the ICO market, stating that a “vast majority of ICO projects… were fakes and fraud.” Even with current regulatory stances, Da continues to believe that the platform “has plenty of room to grow,” and will certainly rise in adoption within the near future.
During the interview, he went on to compare the current situation with initial coin offerings to that of the dot-com bubble in the early 2000’s: “When you started a business that ended in ‘dot com’, you could easily attract capital. The same is what you see with the ICO buzz.”
NEO & Chinese Government Collaboration “Possible”
Alongside its price “boom” in August, rumours began to spread that that a collaboration between NEO and the Chinese government was evident.
However, Hongfei addressed this speculation in the interview, stating that while he does not think it will occur in the short-term, he believes an official integration of the NEO platform within China’s blockchain infrastructure is certainly a possibility:
“I do not expect the government to call me in the short-term and say, ‘Lets use NEO as the blockchain technology infrastructure of China.’ But in the medium term? Why not? I think it’s possible.”
While his statement regarded no certainty of this possible adoption, the NEO team and its core developers continue to work with officials and abide by regulations, allowing their “smart economy” vision the opportunity to become a reality.
Price Effects
While there is no direct correlation, the statement above has served as a strong fundamental factor to consider for NEO’s most recent price surge. As of today (September 25, 2017), NEO has rallied almost 27%, allowing for it’s USD exchange rate to hit a monthly high of $26.
Along with this milestone, the NEO/USD exchange rate has been able to successfully break through its month long descending price channel, signalling the strong possibility of continued bullish momentum.
A falling channel or a descending channel is the price action contained between two downward sloping parallel lines. A break of this channel to the upside usually confirms that momentum has switched from bearish to bullish.
In neo’s case, an upside break of the downward sloping channel seems to be a done-deal.
The 14-day relative strength index is nicely curled up, further signalling the possibility of continued bullish action.
The chart above also shows a nice higher lows formation along the 100-day simple moving average.
Conclusion
Therefore, as Chinese regulatory stances on ICO’s and the cryptocurrency market as a whole continue to roll out, the fate of NEO’s ambitious “smart economy” vision remains unclear. Will NEO truly become the “Chinese Ethereum”? Are you bullish to bearish? Leave a comment down below!
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