A recent rumor has been going around that suggests Chinese exchanges may be closing. This has triggered a lot of panic selling and a short term drop in price. However, I think if the rumors are true the medium to long term effect will be positive price movement. (I lose when I make short term bets, so I'm staying out of that.)

Most of the major mining operations happen in China (especially for Bitcoin). If exchanges close, what are Chinese miners going to do with their coins? They can't sell them for fiat (not easily and not out in the open). So they have a few options:

1. Stop mining. They've already invested a lot of money in their mining operations and from what I understand they can get electricity for free (or at least really cheaply). It wouldn't make sense for them to just stop. They wouldn't have an incentive to stop. So they'll keep mining.

2. Hold the coins they mine. If they're no longer able to easily convert their crypto into fiat, then they could just decide to hold more of them and hope that at some future date they'll be able to realize their earnings. This could push more miners into being speculators, rather than dumping what they mine directly onto the market, and could reduce the supply available to buyers, causing the price to rise.

3. Trade the coins they mine for other cryptos. According to the rumor what's being outlawed is the exchange of fiat for cryptos but not crypto for crypto. They could choose to convert some of what they mine into other coins. I don't know what their options are here. Converting them to USDT, if allowed, might make the most sense for people seeking stability. However, some might choose to invest in projects that could give them a return. Some miners might choose to do this who wouldn't have without the ban since they're going to be stuck in crypto anyway. Ethereum has had constant good news for the past month, and (obviously as an ETH holder) I believe it's a good choice considering the potential.

(I have some other guesses about a few cryptos I think Chinese miners might be attracted to outside of ETH, but I'm not going to mention them here because I have a vested interest in them.)

So whether the rumors turn out to be true or not, I am still choosing to hold my ETH through what may very well be another bloody weekend. I think we'll still be above $400 by early October. Good luck everyone.