This is a sad day for our industry. There will be significant "weeding out" with many suffering significant losses. This is a major correction and will take time to digest.
It is most prudent to take a step back and let the dusk settle. No one can stop the industry from moving forward. My greatest fear is that it could lead to over-regulation that will stiflel innovations.
China's Bitcoin Exchanges Receive Shutdown Orders and Closure TimelineCoindesk:
Sep 15, 2017 at 11:28 UTC by Tian Chuan & Rachel-Rose O'Leary
https://www.coindesk.com/document-lists-closure-steps-for-chinas-bitcoin-exchanges/[...]
6. Exchanges shall save all user trading and holding data, and send it to local authorities immediately in DVDs.
I found it interesting that China wanted the exchanges to forward them information on DVDs. And I wondered if the Chinese exchanges were also expected to supply all of the customer's personal details. It has always surprised me that people hoped their transactions on the blockchain would remain anonymous despite the fact that all transactions are permanently public. A big spill of user data could be very informative. And it could also be used to write better algorithms for determining the probability of assigning particular transactions to people.
For example, it could show how strong correlations are between trading times, amounts, and recipient behaviour are with individuals. It could then group patterns into profiles and use these to detect with higher accuracy which addresses are owned by the same person.
As for the impact and correction caused by the news, I'm surprised it was so small and short-lived. From it's high point this week on September 12, at US$4,344 it steadily dropped until the announcements and news on the 15th. The morning of the 15th opened at 74% of the week's high point. Then during the day of the news and media circus about this issue, it actually climbed to 83% of the high point value.
Figures extracted from:
https://coinmarketcap.com/currencies/bitcoin/And if this shows you anything, I think it proves beyond reasonable doubt that bitcoin is not a bubble. The reason we use a bubble metaphor for artificially inflated investments isn't due to the inflation. It is due to the fact that when a bubble starts to pop, there is no recovery. Everybody playing the game rushes to be the faster rather than greater fool. But we didn't see a significant collapse that a bubble would predict. And then we saw a strong and fast recovery. So thanks China, my bubble concerns are gone. And I believe we might have seen a stronger recovery if Chinese money had felt safer to flow back into the system.
