A quick ban would make a tsunami on western markets, because of the negativism and because traders would expect a fast influx of sell orders of bitcoins from China on western markets.
But a slow death, with lower volumes, lower demand caused by the end or lower influx of CNY and a continuous drop of price on chinese exchanges, with chinese traders cleaning their portfolio of bitcoins, would be worst. It would be another Gox on our hands.

interesting, thank you, but you told us about the problems you are solving, not the solution you are offering. How are you going to solve those problems?

The President has some control of the financial/budget policy (with the Congress), but almost none on the monetary policy. The FED made much more for the recovery of the Economy than the President. Just see the mess in which Europe is. The only difference is the conservative monetary policy of the ECB (only now, to late, starting to change).

1. Is it like currency held by the non-bank public? and therefore increases both the money suply and money base.
Bitcoin increases the money base (it can be included on the concept M1), therefore increases also the money supply (M3). But since the banking multiplier doesn't apply (yet) to bitcoin and its numbers and capitalization are very small, doesn't affect the money supply in any relevant way. Therefore, also doesn't affect interest rates.

2. Is it like deposits? therefore only increasing the money supply
No, since it can be used as a mean of payment/exchange and therefore is in circulation.

3. Is it like a bank reserve therefore only increases the money base
See 2.

4. As it has aspects that make it like a monetary asset and aspects that make it like a non-monetary asset how does bitcoin adoption affect money and non-money demand?
It has all the characteristics of money. Germany qualify bitcoin as private money. It has been qualified as a commodity for political reasons and in incongruet terms, since on the USA they consider transmitters of bitcoin as money transmitters.

5. How does bitcoin adoption affect the LM curve and consequently the interest rate?
See 1.

The 10 May dead line has not been published, it's just the date of the China’s Global Bitcoin Summit.

I don't know nothing for shore about the future price, but with the present data (mainly, the breach of the 380 support on bitstamp and a major lower low at 339) and fundamental terms (serious problems on China; risk of sell pressure from the liquidation of Gox), it's much riskier to keep bitcoins than to sell them.

In doubt, you can always sell only a part of them.

On alt coins, with few exceptions, most of them rise more than bitcoin in good times and drop more than bitcoin when bitcoin drops, therefore, they are even riskier than bitcoin.

We don't have enough information to make informed guesses.

And we have to take in account that many orders are fake orders. When the price goes near, they are gone. Exchanges like Bitfinex allow fiat holders to put huge fake sell orders with only a fraction of the necessary money. The same can happen on the bid side.

If the price went slowly to 100 usds, currently holders would be in panick, I doubt many would have the guts to buy more. Now, 100 looks so cheap. But 430 was like a mirage when the price was at 1150. Different times, different perspectives.

At least, you can identify the dominant trend. As long as you trade the trend, the chances of making money will be higher than the ones of losing it.

Based on this article, this unprecedented micro-action of the PBOC should had made the banks run scared to close the accounts, but there are still some allowing bitcoin accounts.

Like it or not, China is very important for the price of bitcoin. Currently, western markets are just following Huobi.
But, probably, it won't be as important to bitcoin per se, for its development and acceptance.

The difference in both patterns is that you have a new major low now, at 339.

Cryptexcard also asks for personal documents. For them, it seems that people that likes privacy are "bad guys".

You should post a summary or a link to some details. 37m video?

Xapo asks for personal information/documents. You already have alternatives with the cheap polish cards.

The previous top on 10/4/2013 at Gox was 266, but the Gox levels are unimportant history now. The top at Bitstamp in April 2013 was 251. That is indeed my major support now. Ignore the already breached 380 major support on Bitstamp at your peril.

If we can't try to predict the future based on the past, on what would we make any prediction? All the laws of science are based on past behaviour/facts.

I wrote too much already on holding...

Any people looking for historical data can always do analysis on tradingview.com

Giving an opinion (bulish or bearish, it doesn't matter) without presenting any supporting facts or arguments is worthless.