Let’s say Xi wakes up cranky (maybe somebody embeds criticism of him in the blockchain) and bans BTC throughout China. It is now illegal to operate an exchange, buy or sell Bitcoin, or run a Bitcoin node anywhere in China.

... now what? How do you “transfer money across political boundaries without censorship” into or out of China?

It’s also illegal to access many of the sites on this list (https://en.wikipedia.org/wiki/List_of_websites_blocked_in_ma...), but it still happens.

Are you not aware that China has already done that? Multiple times in fact.

I get it, I also understand that the legitimate demand for that is nowhere high enough to command such prices.

If you’re a Venezuelan, then Bitcoin is great for you. But there aren’t that many Venezuelans, and it seems like most of the speculators are American.