Huge BTC price spread between China and West (607 USD)

Since the China ICO ban news as well as a rumour that they might ban exchanges from trading crypto currencies against the Yuan we have a huge gap in price between Chinese exchanges and exchanges in Europe and North America.

Current price on OKCoin is 3,645 USD and 4,252 USD on Bitstamp. This is a difference of 607 USD. These spreads always close over time. Sometimes it takes only a few days and some time it might take a few weeks for the spread to close fully.

I think there are 3 different scenarios of how this could play out:

1. The rumours turn out to be true and the price takes a big dive to $2900 (previous breakout) as prices on the West fall faster to catch up with prices in China and the spread closes as both trade around $2900 where a bottom is established.

2. The news are false and prices increase from the recent slump. China prices rise faster to catch up with the West as people in China gain confidence that there will be no ban on Yuan trading and buy back in.

3. There is no confirmation either way and it takes a few weeks for the spread to close regardless of if BTC goes up or down during this time.

There is an arbitrage opportunity, but the reason the spread is so big is precisely because it's very hard to move money to China and buy BTC with Yuan.

Let me know what do you think in the comments.