China will recover. I am sure.
I think it's wishful thinking to think China will recover. I think it is game over in China. I currently live and work here and it is very clear how the government operates.
First, they seemed open and friendly to Bitcoin. A tactic only, while behind the scenes they viewed it as a threat and tried to determine how to move against it.
Second, they released a vague and general statement through the PBOC banning financial institutions from involvement in Bitcoin, while still stating individuals are free to own it. Again, on the surface appearing accepting of Bitcoin, but those that understand how government works here, reading between the lines as a warning shot to get the hell out. My Chinese girlfriend actually read the press release and warned me in advance that Bitcoin was now being taken seriously by government.
Not long after, a secret meeting was held with payment processors to stop all funding of exchanges. Again, moving in the direction of a complete Ban, but still leaving the door open for individuals to trade bitcoin and withdraw back to CNY.
Next step??? I believe they will set a time banning financial institutions from allowing CNY withdrawal. The government is just corralling the herd. Once this happens, a stampede to get money off chinese exchanges happens. Price falls dramatically.
Result: Bitcoin still legal to hold and trade just as the government initially had said. However, essentially worthless for the average Chinese without a foreign bank account.
