Over blown market reaction on Bitcoin news from Russia and China

I am sure all of you have seen the big drop in Bitcoin and other crypto-currency prices this week. First due to the news on Chinese financial regulators outlawing ICOs, then Russia announcing that they wanted to regulate Bitcoin, and followed by more news that the Chinese government plans to shut local exchanges.

(1) ICOs and China

OK, no one can deny that the ICO ecosystem is in a bubble. Case in point:
http://uk.businessinsider.com/paris-hilton-backs-ico-lydian-celebrities-endorsing-cryptocurrencies-2017-9

But still ....
ICOs are just a fragment of the crypto-market - the market reaction is completely overbaked in terms of the % market cap of ICO money within the crypto-market. According to everything I have read, ICOs account for about $1.5B - which is less then 1% of the overall crypto-currency market. If anything the ICO market was and is probably more significant specifically to Ethereum, that $1.5B would be about 7% of Ethereum Market Cap and it would make sense that ETH dropped a bit. But still the drops in ETH were excessive compared to a hit to a portion of 7% of its market.

The Chinese changes are focused on ICOs, the Chinese government is not shutting down Bitcoin.
The reaction to ban ICOs is strong, but China is not the only to do so. Many ICOs are excluded to US citizen's due to fear of SEC rules. Sure there are some fraudulent ICOs out there or silly and frivolous ones (http://fucktoken.io/), but this does not mean they are all worthless. Also, when one country bans something, the result is many of the business related to it just shifts to other countries that are more supportive. At the end of the day, the market demand is there - business is business - and it will force regulators and governments - probably kicking and screaming every step of the way - to eventually come to grips with it and work with the entrepreneurs to figure out some common grounds to move forward. This will probably take some time to sort out for ICOs (I would estimate years).

Bottom line, ICO are only a part of the Bitcoin market and ecosystem and banning them or slowing them down is just a speed bump in the overall growth of Bitcoin and crypto-currencies. Probably a needed speed-bump. It was getting ridiculous.

Some links on the announcements from China
https://www.cryptocoinsnews.com/bitcoin-price-recovers-major-drop-chinese-exchanges-not-banned/
http://www.zerohedge.com/news/2017-09-08/bitcoin-crashes-massive-volume-china-plans-shut-local-exchanges

(2) Russia

So they want to regulate Bitcoin. Big deal. As with every other central bank and government they are now starting to see crypto-currencies as both a threat and an opportunity. By regulating it they hope to minimize the threat and ensure they get their piece of the pie. If they over-regulate however - they will lose their place in the global market for crypto-currencies which will simply be developed and flourish in countries where the ecosystem and environment is healthy and positive. Regulation is not necessarily a bad thing, it is of course a challenging thing to get "right".

https://www.forbes.com/sites/kenrapoza/2017/09/08/russia-faces-internal-battle-over-bitcoin/#4e63df3d207e

Lastly, there are a lot of bitter people out there who did not get in early on crypto currencies and are afraid to get on the train at the current ticket price, of course they will come out and hop on any bandwagon to bash it and ruin the ride for spite; or try to get a better price.