http://www.businessinsider.com/initial-coin-offering-china-b...
Namely:
"However, the wording of the PBoC edict also suggested that trading and usage of all cryptocurrencies, including bitcoin, could now be illegal in China.
The PBoC said that virtual currencies that are "not issued by the monetary authorities... do not have legal status equivalent to money, and can not and should not be circulated as a currency in the market use."
The PBoC added that "any so-called tokens financing trading platform shall not engage in the exchange of legal currency and tokens." It even goes so far as to ban platforms from "provid[ing] pricing, information, [and] intermediary services.""
China's announcement was probably a trigger that caused people to sell, rather than being directly responsible for people selling.
https://www.youtube.com/watch?v=Ry6PpRXk0dQ
This is from 2014! (I know the link goes to content not typically found on HN, I'm doing it for the purposes of illustrating that this is such a seemingly common occurrence.)
A graph like that was going to correct, one way or the other. PBOC's decree seems incidental rather than the root cause.
So you're agreeing with the title - the announcement (directly or indirectly) is what caused the fall in price.
It's a temporary phenomenon, but the price going down can make the price fall farther, because there are a bunch of amateur traders who think it's a good idea to buy when the price is rising and sell when it's falling.
If you take bitcoin contributions, you need something offchain to track who contributed what, and issue a bunch of minting transactions.
Some ICOs do that, but if it's ERC20 that's generally in addition to automated minting via smart contract, and since the token and ICO are running on the Ethereum blockchain it's predominantly ETH that gets contributed.
Liquidity on exchanges later doesn't have much to do with any of that.
professional traders and asset managers do this exact same thing.
The upshot is: every time margin gets too deep on Bitfinex, another batch of Tethers is created out of thin air, and the price gets a pump. Bitcoin's recapitulated the history of finance, and now it's got to Quantitative Easing.
It's amazingly tangled, I'm trying to put together an explainer blog post, but Bitfinexed has the best coverage of the pieces:
Amateur here, but how is that not a contradiction?
Edit: Although, whether or not they're backed by anything isn't really all that relevant, considering that their terms of service[1] say: "There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money."
So backed or not, nobody has any obligation to give you dollars in exchange for your tethers.
ICOs are an Ethereum phenomenon. Ethereum isn't a fork of Bitcoin's codebase and thus isn't an altcoin.
Citation?
Ether is privileged on Ethereum. It's what mining gets you, it's what transaction fees are paid in, if proof-of-stake comes around, it will be what's staked, and any transaction can include some. I don't expect any of these to change.
The concern, that I share, is that this system is very vulnerable to Ponzi scheme. And unlike Bitcoin, the crash of the pyramid is not a feature in this system.
I think people are right to warn and forbid this thing. Pyramid scheme can have large-scale effect in an economy.
I think etherum provides way to do things more responsibly but I understand that authorities moved quickly when they saw anonymous companies with no products receiving a billion USD.
Even that will cause ripples when it collapses. You don't want it to grow more.
To me It looked like Bitcoin just bounced off a psychological ceiling at 5000USD. It has done this with various round number levels in the past. It makes a bit of sense if you consider people are inclined to think something like "I'll sell when it reaches $5000"
There also seems to be a tendancy to use evocative language (collapse,tumble,collapse etc.) to describe what has often been a loss of only a few weeks worth of gains. I guess when people have an agenda to push on the other side they call the same thing a correction.
I don't claim to have any special knowledge of how all this works. It just seems to me that many of the authoritative sounding voices are actually as clueless as the rest of us.