it's not a market correction neither a crash, its a shift.
value is shifting from bitcoin to : financial institutions linked cryptos on one hand and anon crytos on the hand.
mark my words, these regulations are just the begining.
in the end only will stand bank approved cryptos, and the other ones will be illegal anon cryptos.
The one you are outlining is indeed a doomsday scenario for Cryptos as we know it. And you may be right in the substance, but hopefully not in the timing. This may be just a market correction.