Bitcoin plummets, many losers
As a result, many interesting sayings have appeared in the market, such as the so-called “free fall”, or the ridicule of “people mixing in the currency circle, starving nine times in three days”.
Judging from the “resilience” of Bitcoin’s decline, the single-day trading price fell for 12 consecutive days in June, setting a record for the longest losing streak since its inception in 2009. Judging by the “magnitude” of Bitcoin’s decline, according to CoinGecko, Bitcoin has fallen about 70 percent since its peak of $69,000 in November last year. The total market value of so-called virtual currencies fell below $1 trillion.
This isn’t the biggest short-term drop in Bitcoin’s history. But clearly, Bitcoin is indeed in an all-time high price range. Therefore, the resulting investment losses are extremely “tragic”.
According to the Bloomberg Billionaires Index, seven cryptocurrency-related billionaires have lost a combined $114 billion since last year’s “peak hour” in bitcoin prices. Of course, the more you get richer in Bitcoin, the more you lose now. At the end of last year, Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, who was the richest Chinese in the world with a net worth of nearly 96 billion US dollars, may have plummeted by 90%. %, evaporating 80 billion to 90 billion US dollars.
Individual losses are huge, and companies are no exception. As a “loyal fan” of cryptocurrencies, Musk’s Tesla also suffered heavy losses in this wave of market. Data shows that Tesla currently holds 43,200 bitcoins, worth $968 million, and has lost about $530 million in bitcoin investments.
In addition, some countries also suffer from pain. El Salvador uses bitcoin as legal tender and has previously bought 2,301 bitcoins. According to data from nayibtracker.com, it has already lost more than 55.%.
Bitcoin has not been around for long, but there are many stories
Bitcoin is a new thing.
In January 2009, Bitcoin was born. At that time, its price was “0” in obscurity. for free.
On May 21, 2010, an American programmer exchanged 10,000 bitcoins for 2 pizzas. At that time, the market price of these two pizzas was US$30, and the price of 1 BTC was US$0.003. This is the first BTC price. Pricing once in the real world.
After that, it gradually began to go straight to the sky.
On November 29, 2013, the price of Bitcoin “peaked” for the first time, hitting $1,137.
And began to “straight down nine days”.
Just over a year later, on January 14, 2015, it fell 84% to $183.
On December 17, 2017, Bitcoin peaked at $19,041. A year later, it bottomed out again, reaching $3,204, a cumulative decline of 83%.
Such a big opening and closing is obviously extremely “unconventional”. Such products in the financial market that can fall to a “collapse” in a short period of time, and then return to the peak or even “higher” in a short period of time, are really rare, especially for many times. Nothing more. It can be seen that Bitcoin has not been around for a long time, but there are many stories.
In fact, the debate over the value of cryptocurrencies such as Bitcoin has never stopped.
The more symbolic and story-telling ones may be Buffett, the richest man of the previous generation, and Musk, the opinion leader of this generation.
After constantly attacking each other, at Berkshire Hathaway’s annual shareholder meeting not long ago, Buffett once again made a series of remarks against Bitcoin, and firmly stated that “no $25 will be given.” Peter Thiel, an American billionaire known as the “Godfather of Silicon Valley Venture Capital”, once called Buffett “Bitcoin’s number one enemy”. The video was wildly retweeted and ridiculed by a group of wealthy “later kids”, including Musk. As we all know, Musk has even vowed to make Bitcoin the purchase currency for Tesla.
In the era of bubbles, how can people not believe in bubbles
It seems that this is a kind of conscious confrontation between “old money” and “new money”, or a substitute for investment means.
However, perhaps far from it.
According to statistics from the Korea Financial Services Commission (FSC), as of the end of December 2021, there were 5.58 million users of virtual asset exchanges in Korea, of which 30 and 20 years old accounted for the highest proportion, reaching a total of 3.08 million. There are 3.08 million cryptocurrency holders aged 20-39, accounting for 23% of South Korea’s population of this age group (13.431 million). Moreover, they are also the fastest growing group of people. In the first quarter of 2021, according to Korean party statistics, there were 2.5 million new accounts on the four major cryptocurrency platforms in South Korea, of which 33% were in their 20s and 31% were in their 30s.
As ordinary people, why do they “favor” the so-called cryptocurrency so much?
From a survey of South Korean college students, 33% believe that high returns are the reason for their interest, and even more than 10% of the respondents believe that cryptocurrency is their “last chance” to achieve a class transition.
Since its inception, Bitcoin has “carried” a little “idealism”.
It’s a challenge to the “old world” rules. In 2008, with the global financial crisis, trust in the U.S. dollar and the financial system dropped to freezing point. It is against this background that Bitcoin is based on the “alternative”. It challenges not only the status of the dollar, but also the wealth differentiation and class solidification brought about by economic financialization.
Just like El Salvador’s attitude towards Bitcoin. As an individual lacking resources, in an era of economic financialization, seeing that hard-working labor income is becoming less and less worth mentioning, or only “another way” can “overtake on a curve” be achieved. The so-called cryptocurrencies and their derivatives are obviously one of the best ways.
If you stop at the end of 2021, Bitcoin has risen tens of millions of times in ten years. Even with the “slump” now, the husband is still staggering.
In the age of bubbles, how can people not believe in bubbles.
The bubble may burst again
But this bubble may burst again.
Due to the background of Bitcoin, it is often inversely related to the strength of the US dollar and the reliability of the world economy. In 2013, the United States began to withdraw from quantitative easing, and in 2015, the United States began to raise interest rates for the first time in a decade. Bitcoin goes up and down. In 2016, the United Kingdom left the European Union, and the dark horse of the United States President Trump took office. In 2017, interest rates were raised three times. Bitcoin has another round of ups and downs.
In 2020, the new crown epidemic ravaged the world. In 2022, the Fed will raise interest rates. Another round of ups and downs?
The plunge came not only from ordinary trading or “stomping,” but also from many long-term holding institutions. In the first four months of 2022, public mining companies sold 30 percent of bitcoin production, according to Norway-based research firm Arcane Research. The world’s largest Bitcoin spot exchange fund (Bitcoin Spot ETF) is also selling BTC. The Purpose Bitcoin ETF, which tracks bitcoin’s spot price, saw an outflow of 24,510 BTC on Friday, the worst single-day redemption since the fund debuted on the Canadian stock exchange in April 2021, according to Arcane Research.
In fact, it is far more than Bitcoin that has plummeted. Data shows that the total market value of the entire cryptocurrency market in November last year was 3 trillion US dollars, and the current total market value is about 844 billion US dollars, and 21,600 “evaporated” in just 7 months. billion, a decrease of more than 70%.
The stablecoin Terra de-pegged from the U.S. dollar last month before the coin crashed. It used to be called “Motai in the currency circle”, but sober came soon after being drunk. UST collapsed on the 9th and depreciated by 99% in 48 hours. On May 17, the price of LUNA coin was almost zero.
More and more countries have begun to pay attention and have introduced cryptocurrency regulatory policies. The International Monetary Fund (IMF) has also continued to pay attention to the fragility of the cryptocurrency market, arguing that it is difficult for countries to track the risks posed by the unregulated crypto industry, and has repeatedly called for a comprehensive, consistent and coordinated global crypto asset regulatory framework. IMF President Georgieva once said that stablecoins without asset backing are a “pyramid scam”.
The emergence of cryptocurrencies is not without merit, and its technology and applications may bring more inspiration to future digital currencies, blockchains, etc. But how many bubbles and scams will be generated in this process is difficult to confirm. From the popularity of ICO to the popularity of NFT, it is just a change from a PPT to a JPG. Trading without effective regulation, no matter how active, is always just a false prosperity.
Look into the abyss, and the abyss looks into you.
Bitcoin has been called to fight against currency spam, but it has finally survived the rounds of bubbles in the cryptocurrency series.
The author Wan Zhe is an economist and special commentator of The Paper