One question: when you say there is no way the Chinese gov would allow bitcoin on the markets, what exactly are referring to?
If Chinese government pays attention to bitcoin, it would act the same way they do towards shadow banking: fine those involved in bitcoin yet backed by government, and prosecute the entities without gvernment backing (even execute a few, like Wu Ying last year and Zeng Chengjie this year). The charge will be as usual: illegal fund-raising.
Right now there are two 'concepts'.
1. Chinese traders speculate. Few believed in a non-governmental currency taking root, as few believed anything significant yet non-governmental can take root. This translate to a huge bear market when Chinese government acts.
2. The atomsphere in China is like the roaring twenties which I read from books. Everyone feels like they are ready to make a big fortune. This can translates to potential huge bull markets.
My two cents.
I feel it is still years away until Chinese government taking action on bitcoin. A centralized power does only a handful of things at a time, and their hands are full in Xi's first 2 year's reign.
Makes sense. But from my view here in the West, China is very eager to appear mainstream especially when it comes to finance and capitalism. Therefore, if Bitcoin were to get mainstream acceptance in Europe and the US, I could see a world where China didn't try to ban bitcoin. Bitcoin isn't going to threaten a communist Chinese government at anytime in the future anyway.