It won't happen, there will be institutions like banks around in the near and the far future. There probably will be co-existence and its, imo, highly likely banks will adopt some form of crypto-currency in the very near future albeit I highly doubt it's going to be BTC due to its decentralised nature and the fact that its use case specifically intended to cut the middle man, ie, banks and other institutions, out.

You have to keep in mind that none of the crypto-currencies, as far as I'm aware, have any significantly sized lobby group that wields influence in any sovereign nation. If banks tomorrow decide that crypto's are a real threat, how long do you think it would take for governments to adopt rulings and laws that will heavily tax or outright ban crypto-currencies?

This!

Well, they definitely made sure to walk away with something as they are buying out their own company with seed funds. I just read they are diversifying the seed capital out of crypto and allocating to, but not limited to, drumroll, precious metals. I chuckled a bit there

Having said that, interesting project, we'll see what the future holds...

Had to sign up for this...

If there's one thing that economists almost always fail in, it's predicting a crash. It's a soft science, all your models are theoretical.

The major value of Bitcoin that you're overlooking is that it is decentralised, and in the case of the PBoC and capital outflow restrictions, it offered a cheap(!) and relatively easy solution for the Chinese to get money across borders without questions asked. Hence why the Chinese account for the majority of Bitcoin traded.

My guess is that the massive inflow lured a lot of speculators in and they're now liquidating there positions, cashing in and standing on the sidelines until after they find out what will happen after 08/01. However, financial companies are trying to rush into the bitcoin market as well with several applications filed for BC ETF's. One apparently got approved in Switzerland the other day, which means fresh capital inflows from your average (wealthy) mom & pop investor.

In my opinion this bubble isn't ready to pop yet as mainstream investors aren't pouring their money in yet. When that day comes, I'm selling what little cryptocurrency I own.