Sorry for the long reply, but I have to get this out of my head:

You're forgetting something very important in all of this and that's the fact that BTC futures went live last month on the 10th and the first set of contracts today, the 17th of January. Since the price was fixed at about $15k USD back in December that had consequences on yesterday's market, apparently big ones.

Normally this would be super risky for the types of entities that normally do this sort of stuff, BTC moves fast and it is rather unpredictable, but it's full of new money from new investors who don't really know what the hell they're doing. What does that mean? If you're a massive hedge fund looking at crypto in early December you'll probably realize you can flip the table on the market by first making, then profiting from, chaos. This would be done by betting on the short at current market price, but also actually buying the amount that same day. Since you're holding both the contract and the BTC, effectively this means that you cancel your risk and reward regardless of what the market looks like in January. Under normal circumstances this would be a pointless waste of time, but crypto is new and exciting stuff and you're out to make a killing.

Since you hold a rather large portion of the market (you are now a very large whale) you can dump all that BTC right before the contracts expire which will set off all the red flags, bells, whistles, and other such things that happen with weak hands. Remember, you know the majority of these people are uneducated and know little to nothing about the financial world. You wait patiently, possibly chuckling to yourself at how effortless this is, before you then buy back whatever amount you owe on the futures at the supremely low market price. Subtract that price from the price that you sold at, this is your total profit.

See, the thing is, none of this was exactly a secret to anyone. Crypto is unregulated, there's nobody there to say "you can't do that" and to protect the uninformed from losing their life savings. This is what the crypto world wanted, thinking it was the way of the future and the ultimate way to stick it to the man.

This is also why what we've seen on the 16th of January, 2018 will not be the last time it happens.

China's situation is by no means a coincidence either, I can guarantee you that they were well aware of this and well aware of what was coming. Poor timing is not something the Chinese do, I can say with confidence (even though I have no evidence to support it) that yesterday was quite intentional. While there have been hardliners in the Party that absolutely hate this whole cryptocurrency capitalist nonsense and want to see heads roll, their votes can easily be secured by throwing them bones now and again. It's politics and they're zealots, so hey, why the hell not. That's one bird down, but what about the other one? What could China possibly want with the crypto world on its knees?

Did I mention I like to write stories?

Yeah, if I were writing this story this is where things would get interesting. I've been thinking about China and cryptocurrency for awhile, off and on as the days go by, but their announcement about the miners really got me to think a bit more carefully about the whole thing. Odd that they start complaining about electricity now, China's supply isn't exactly completely inundated with demand because they're building new power plants like they're going out of style. Miners hogging the juice is just a small price to pay for Chinese manufacturers having increased sales overseas, the miners create a demand for things like video cards in foreign markets to compete with their Chinese counterparts. So why? Now this is all pure speculation, I'm just spitballing here, but I think it was part of a wider plan. A plan I'm going to guess involves something dirty or something Korean that the PRC doesn't want to get caught with. Telling the miners to pack it up affected the market, I think that was a test to see if they were good to go. At this point you may be wondering if I'm off my rocker and that's possible, but really, think about it... What's crypto's biggest and longest-standing advantage?

If you were funding something you shouldn't be funding then how would you do it? If you tell the American president that you're done supporting your pesky little neighbor, how would you still put cash into the regime so it doesn't implode and create a mess on your border? How do you get the money to do stuff like that, but cheaply? Why, that's easy, just wait until the BTC futures Whalefest 2018 plays out and then just say you're going to do something! Prices have dropped and the crypto world is reeling from a one-two punch right to the gut, now's the time to buy in and make it disappear into the digital abyss.

I'll tell you right now, if crypto existed when the CIA was playing with the Contras I guarantee you they would've jumped at the opportunity to use it. Some might consider this a big black mark against it, how could the government use something so pure and free for nefarious means? Same way you, I, or anyone else can do it; it's unregulated, this is what crypto was meant to be.

Expect to see these kind of things to happen from here on out. I can't very well prove the Chinese end game here, but it should be obvious that what we experienced yesterday is a sign the market is working exactly as intended with or without my wild imagination making it more exciting.