Holders of the NEO altcoin will not be too happy with the way things are evolving right now. After a massive price surge to nearly US$50 per coin not too long ago, the markets have taken a turn for the worse. In fact, one NEO is only worth US$20.16 right now and the value is still dropping as we speak. With a 33.58% loss in the past 24 hours, things aren’t looking all that great for this currency. The ambition to become the Ethereum of China has seemingly backfired.

NEO Price Plunges like a Rock

It is not entirely surprising to see the NEO price going down as we speak. After all, the altcoin saw a massive value appreciation not too long ago, which was bound to eventually result in a correction. However, NEO had successfully maintained its US$34 value for quite some time. Many people were hoping the price would go up again, but things have not evolved in that direction by any means. Instead, the NEO price continues to go down as time progresses, which is rather problematic for this project and its holders.

As of right now, the “Ethereum of China” is dealing with a major price collapse. NEO still maintains a market cap of just over US$1 billion, although that number may go well below this threshold a lot sooner than people think. With the value per NEO dropping to US$20 and potentially going much lower in the next few hours, things aren’t looking great. This dip will create new opportunities for people to stock up on some cheap NEO, assuming people are willing to take this risk in the first place. Right now, that seems rather doubtful, though.

Although it’s unclear why NEO is dropping, a recent decision by the Chinese government may have something to do with it. As we previously reported, legislators were considering banning all cryptocurrency ICOs outright. Late last week, this was merely a suggestion rather than confirmed fact. It now appears it has indeed become reality and cryptocurrency ICOs are entirely illegal in the country. Companies can no longer raise money through ICOs and a lot of major platforms will be seeing additional scrutiny moving forward.

This is not good news for NEO either, which gained its initial traction mainly through Chinese investment. With this new warning, a lot of investors are trying to liquidate their assets to evade government scrutiny. Whether or not those efforts will be in vain remains to be seen, though. Rest assured the markets will remain quite volatile for quite some time to come. NEO got caught up in this negative momentum and may see some wild fluctuations for the foreseeable future.

It is evident some Chinese exchanges are pushing the NEO price down even further as we speak. More specifically, Yunbi, Jubi, Yuanbao, and 51szzc all value NEO a bit lower than US$20. It is possible this is only a sign of things to come. If the NEO price keeps declining at this rate, it is only a matter of time until it drops below US$20. No one knows for sure what the real value of this altcoin should be at this time. Moreover, rumors regarding the first ICOs to be launched on the NEO platform have now been canceled as well.

It is certainly possible we will see some increased scrutiny by Chinese officials regarding Ethereum itself. Indeed, the platform is the main reason why virtually all cryptocurrency ICOs exist. Although it is not a centralized entity by any means, the Chinese investment community may effectively pull their support for Ethereum until the situation becomes a lot more clear. It is uncertain this will actually happen, though, as there are still a lot of unanswered questions to consider right now.