China is gonna China. They've banned BitCoin, IIRC, four or five times now? To quote Fred Wilson, "Whatever China bans, invest in it." There is a lot of mining activity in China (BitCoin Cash is predominately a Chinese play) and some in towns that depend heavily on electricity generation (and thus are also in mining), and they won't go dark. What probably will happen is a licensing regime around BitCoin in China... or they "ban" (only possible on paper, really) one crypto or another, but will "approve" another they will try to control behind their Great Firewall. That situation would be akin to their laws on social media: Ban FB/Twitter, but have their own versions instead. But, basically, when considering China's role in BitCoin/Crypto ignore the FUD and the BS click-bait, and focus on the bigger global picture.
Your other questions...
Nobody owns blockchain. Nobody controls BitCoin. It's 'governed' not by central committee, like the U.S. Federal Reserve or PBoC, but instead by a decentralized protocol. It cannot be 'banned'. Well, on paper yes, but not in practice. Nobody can just take it over. Typical DNS websites can be seized, but once we're done using inverted infrastructure to migrate to DAPPS and we're full decentralization it won't be stopped. In the meantime, impeded by bad policy and FUD? Maybe, probably in some places. But not stopped. To hack and completely take over the Blockchain would require the computing power of the Universe.
As to ICO's, most (not all) have been scammy and there are legit questions as to (1) should this product/service be on Blockchain at all? (2) does the token have an actual use? (3) if a legit start-up, will it survive? Most of these first-wave ICO start-ups will fail. But that's to be expected in a healthy marketplace and it's a natural part of new tech's evolution. I think the 2nd/3rd Wave Blockchain/ICO start-ups will be more successful. So there should be skepticism of most (again, not all) ICO's. But ban them? China has jumped the shark on that one and if it continues to do so, will render itself economically non-competitive in this space in the long-run.
Some countries - like Estonia - will be very Blockchain/Crypto friendly. Others will not be. Capital and entrepreneurs will go where the conditions are best in this space. Cool thing about decentralization is, there is no need for everyone to be in one country or region. So, you can reasonably forecast which countries will do best in Blockchain/Crypto by how friendly their laws are. As for you, as a trader and holder of crypto, if you're smart with your wallet use and are willing to be patient... and perhaps, if necessary, move your coin to whatever exchange you need... you will be fine.
The whole point to trading crypto currency, IMO, is to get more BTC. At that point, it's up to you. Do you HODL? Do you 'reinvest' in other cryptos? Do you put it in cold storage and wait years? Do you go liquid for USD (or another fiat currency), or at least partially cash out? It's up to you.
That said, in 2-3 years BTC will be as fast or faster than Visa/MC processing. With SegWit and Lightning, and other BIP's on the horizon, eventually we will be streaming money. Think about how streaming impacted video and audio... now think about it with money. And once tax laws change to make everyday commercial use easier, mainstream commercial adoption will take off. Future is bright. And at some point in the future, since so much of our lives and market activity is already digital, BitCoin (or other cryptos) might be all you need (sans the legacy USD/fiat payments of loans, taxes, etc.) You will have your own bank on your mobile smart phone.
Why are people selling?
Because FUD. But mostly because BTC was due for a sell off, and profit taking. Nothing goes up in a straight line. Dips are buying opportunities. Highs are profit taking opportunities. What China does, or what some billionaire says is marginal.
Long reply, but seemed worth it. Cheers!
RE: I NEED TO UNDERSTAND HOW CHINA CAN BAN ICO'S I DON'T WANT TO INVEST IN OR OUT OF FEAR