so if china "orders all bitcoin third party accounts to be closed" then the effect might be bitcoin withdrawals? if you dont want to mess around with fiat, just buy bitcoin and get out right?
Bitcoins would be useless to most Chinese, I believe, They already cannot use them for anything except trading.If the news is real, I guess that most clients of the Chinese exchanges will want to sell at any price they can and withdraw their money.
The only buyers in the Chinese exchanges would be arbitragers, or more generally people or partnerships with accounts on both Chinese and Western exchanges. They can buy cheap bitcoins in China and sell them for somewhat higher price in the West. That will depress the price in the West to some extent, while in China it will go to zero.
However, if the ban on depositing money is effective immediately, those arbitragers will be limited to their current CNY balances in the exchanges, so the price in China may go to zero very fast. In any case, I suppose that all the bitcoins held by the exchanges will be sold in the West, on the open market or off it.
The price on Huobi is holding at ~3400 now. Are they thinking that the ban may be a hoax? Or is arbitrage propping up the price? Or only 7% of the Huobi clients have seen the rumor?
