Analysts believe that the sudden drop of Bitcoin is due to the current market impact of the spread of the epidemic caused by the new virus strain Omi Keron. Anxiety and pessimism are obvious, coupled with various news in the global market. The Fed hints that it will end early Taper, record highs of inflation in many European and American countries, and the continuous spread of financial institution supervision cases from various countries-all directly or indirectly contributed to this digital currency market crash.
Recently, the virtual currency experienced another round of sudden collective plunge!
On December 4, Beijing time, Bitcoin plunged sharply, as low as $4,2587.8, a drop of 20.59%. Although there has been a rebound since then, it also fell by more than 10% that day.
After the opening of the US Eastern market on Friday, Bitcoin fell below the $50,000 mark in one fell swoop, and fell by more than $10,000 in the day. As of press time, although Bitcoin rebounded to about $49,000, it was still more than $57,000 at the opening of the US Eastern time on Friday. 16%.
As of press time, the price of Bitcoin is approximately US$49,497, a drop of nearly 30% from the historical high of US$6,8990.6 on November 10.
Misfortunes never come singly, and other cryptocurrencies have also collectively dived-Ether touched as low as $3500 USD, falling by more than 17%; Dogecoin (Dogecoin) fell by more than 40% at its peak, Solana (Solana) coin fell by more than 9%; Ida (ADA) coin fell more than 8%. However, as of now, the prices of some cryptocurrencies have been corrected.
According to data, as of 8:00 pm on December 4, a total of 417,000 people have liquidated their positions in the past 24 hours, and the total amount of digital currency contracts on the entire network has reached US$2.584 billion. Among them, the amount of Bitcoin’s liquidation within 24 hours alone exceeded $1 billion.
Even though all digital currencies have rebounded, as of noon on the 5th, Beijing time, according to BTC123.fans data, in the past 24 hours, a total of nearly 270,000 people had liquidated their positions, and the amount of liquidated positions in 24 hours reached 1.567 billion U.S. dollars; in the past; The amount of liquidation within 24 hours was 474 million for Bitcoin and 364 million for Ethereum.
Bitcoin prices have been falling all the way recently, but big companies are buying
Since the record high on November 10th, the price of Bitcoin has continued to fall. Especially in December, the price of Bitcoin accelerated its decline.
On December 1, the highest price of Bitcoin hit $59,000, which is close to a high of $60,000. But since then, the waterfall quotation has been opened.
On December 3, Bitcoin fell by more than 12% during the day, with a drop of more than $5,000, reaching a minimum of $51,600, and it began to drop to the $50,000 mark.
On December 4, Bitcoin did not stop its downward trend. After falling below the $50,000 mark in one fell swoop, it was inserted shortly to near $42,000. The intraday drop exceeded $10,000, the lowest price since September 30.
Prior to this, the price of Bitcoin hit a record high in November, breaking through to US$69,000, and the overall market value of cryptocurrencies climbed to around US$3 trillion. However, after failing to break through the $70,000 mark, Bitcoin’s price trend was obviously weak.
It is worth noting that the price of Bitcoin has experienced shocks, but the world’s listed companies holding the largest number of Bitcoins, Bitcoin “giant whales” are buying in large quantities.
According to documents submitted by MicroStrategy to the US Securities and Exchange Commission (SEC) this Monday, the company purchased 7,002 bitcoins in October and November at a cost of US$414 million, with an average price of US$59,187 per bitcoin. After completing this “purchase”, the total number of bitcoins held by MicroStrategy has exceeded 120,000.
According to statistics from the masters on the Ouke Cloud Chain , as of December 3, 2021, MicroStrategy holds a total of 121,000 Bitcoins, with a total value of US$6.841 billion.
The company’s position of Bitcoin (partial), data source: Ouke Cloud Chain Master
Among all the companies that hold Bitcoin positions, MicroStrategy ranks third in terms of the number of positions and the value of positions. If you look at the ranking of listed companies alone, MicroStrategy surpasses Tesla, Galaxy Digital Holdings, and Voyager Digital. The holdings of many well-known listed companies, such as LTD, Square, Inc, Coinbase Global, Inc, etc., made it to the top of the list, even surpassing the total holdings of all subsequent listed companies.
Why did it suddenly fall?
Analysts believe that the sudden drop of Bitcoin is due to the current market’s impact of the spread of the epidemic caused by the new virus strain Omi Keron. Anxiety and pessimism are obvious, coupled with various news in the global market. The Fed hints that it will end early Taper, record highs of inflation in many European and American countries, and the continuous spread of financial institution supervision cases from various countries-all directly or indirectly contributed to this digital currency market crash.
In addition, according to the analysis of Noelle Acheson, a market analyst at Genesis Global Trading, a digital currency financial institution, excessive market leverage is also an important factor in this Bitcoin flash crash. For example, Binance, the world’s largest digital currency exchange, provides users with the so-called “Leveraged Tokens (LT).” Unlike leveraged trading, users can maintain margins and worry about liquidation risks without any collateral. Have leveraged positions under. To put it simply, when the market currency price rises by $1, using leveraged tokens can make $3, but when the market currency price drops by $1, leveraged tokens will also lose $3. This LT directly magnifies the risks of digital currencies.
The point that LT is criticized by most users is that if a $100 investment loses 10%, only $90 is left; if it makes a profit of 10% the next day, it will only make a profit of 10% on the basis of $90. In the end It can only reach 99 dollars. If the investment portfolio suffers a loss, it needs more profit than the loss to reach breakeven. The nature of LT is so, such losses are inevitable, and because of leverage, this corrosion will be multiplied. This also leads to higher wear and tear of LT compared with traditional margin leveraged products. Once LT suffers a loss, it needs higher returns to achieve breakeven.
But despite the natural flaws, global user demand for leveraged tokens is still increasing.
It is worth mentioning that Huobi, a cryptocurrency trading platform, recently issued an internal letter to remind Chinese mainland users to clear their account assets, and made it clear that the deposit function for mainland Chinese users will be disabled on December 14 and mainland China will be banned on December 15. The user’s currency transaction function will be delisted for OTC transactions on December 31.
The new Chinese richest man’s net worth has shrunk by more than 10 billion in a day
Recently, big news in the currency circle has continued. The founder of the cryptocurrency platform Binance, Zhao Changpeng, has surpassed the chairman of Nongfu Spring, Zhong Suisui, and the fact that he has become the new richest man in China has also been screened in the circle of friends.
According to Caijing Magazine, Binance has only been established for four years and has become the world’s largest cryptocurrency exchange. It has 3,000 employees worldwide and has a daily trading volume of US$76 billion, more than its four largest competitors combined. According to insiders, according to the current transaction scale, Binance’s valuation will reach 300 billion U.S. dollars (approximately RMB 1,912.7 billion).
It is reported that Changpeng Zhao controls most of Binance’s equity. According to “Forbes” data, founder Zhao Changpeng owns 30% of Binance shares. According to this calculation, Zhao Changpeng’s net worth has now reached 90 billion US dollars (equivalent to 573.3 billion yuan). This wealth means that Zhao Changpeng has become the richest man in China and ranks among the top ten richest people in the world.
However, on November 30, Changpeng Zhao posted information on social media that if 0.01% of the company’s equity is sold for 1 U.S. dollar, whether the company is worth 10,000 U.S. dollars; if a total of 1 trillion currency is issued, the price is 1 U.S. dollars. If he sells a token, he will have 1 trillion dollars worth of coins. And later commented that illiquid valuation does not mean anything. Suspected of responding to a hot search for a $90 billion net worth as the new richest Chinese man.
As of 8 pm on December 4, Binance Coin (BNB) has fallen by nearly 13%, and its latest total market value is approximately US$90.776 billion, a decrease of over US$13.5 billion compared to the previous day’s total market value.
Changpeng Zhao once said that in terms of investment, he owns some Bitcoin, but most of his assets are Binance Coin. However, Changpeng Zhao did not disclose the number of Binance Coins he holds. However, according to previous public information, the Binance team holds about 40% of Binance Coin, while Forbes data shows that Changpeng Zhao owns 30% of Binance. Based on this rough calculation, Zhao Changpeng’s net worth has shrunk by about 10.3 billion yuan (about 1.62 billion U.S. dollars) in one day.
According to previous reports, Changpeng Zhao is a Chinese Canadian who has a high influence in the field of cryptocurrency and is called “CZ”. He was born in 1977, lived in Jiangsu as a child, and later moved to Vancouver, Canada with his family, and currently resides in Singapore temporarily.
In 2005, Changpeng Zhao founded Fuxun Information, Bijie Technology and other companies in Shanghai and made his first pot of gold. In 2013, he entered the Bitcoin field. In 2017, he founded Binance with his team and issued the digital currency “Binance Coin” (BNB). Half a year later, Binance’s users reached 6 million, making it the world’s largest cryptocurrency exchange and maintaining its leading position in the industry to this day. Changpeng Zhao stated that he hopes Binance will grow at a more moderate rate. “We hope that other exchanges can grow a little bit, so that they can share user pressure with us.”
According to data from the Coinglass website, from the perspective of Bitcoin holdings, as of 9 pm on the 4th, the blockchain trading platform Binance’s Bitcoin contract holdings accounted for 22.18%, ranking first among all platforms.
However, on a global scale, cryptocurrency exchanges lack supervision and are in a gray area in many countries. Up to now, Binance has been warned by financial regulators from the United Kingdom, Germany, Japan, Malaysia, South Africa, Singapore and other countries, and successively announced the withdrawal of users in the United States, China, and Singapore.
Munger praised China’s decision: I hope that cryptocurrency has never been invented
As the price of Bitcoin plummeted, Warren Buffett’s old partner and Berkshire Hathaway Vice Chairman Charlie Munger also sneered at cryptocurrencies.
Munger said at an industry conference recently, “The current global market environment is even more’crazy’ than the Internet bubble in the late 1990s. I hope that cryptocurrency has never been invented.” He also said that he would never Hold cryptocurrency.
“I think China made the right decision.” Munger praised China for not letting the cryptocurrency investment boom go too far. “They acted in a more mature way.”
As early as 2013, five ministries and commissions including the People’s Bank of China issued the “Notice on Preventing Bitcoin Risks”, clarifying that Bitcoin does not have the same legal status as currency, and cannot and should not be used as currency in the market, and requires financial institutions And payment institutions shall not “use bitcoins as a price for products or services, shall not buy or sell bitcoins as a central counterparty, shall not underwrite bitcoin-related insurance businesses or include bitcoins in the scope of insurance liability, shall not directly or indirectly provide customers with other “Bitcoin-related services” effectively blocked the transmission of related risks to the financial system.
In 2017, the People’s Bank of China, together with the Central Cyberspace Administration and other seven departments, issued the “Announcement on Preventing the Risk of Token Issuance Financing”, clarifying that the virtual currency trading platform and the ICO (Initial Coin Offering) were suspected of illegal fund-raising. Illegal financial activities and carrying out clean-up and rectification work have effectively blocked the impact of the virtual currency bubble on our country.
Since 2021, the People’s Bank of China has interviewed some banks and payment institutions on the issue of virtual currency transaction hype, requiring all banks and payment institutions to strictly implement the “Notice on Preventing Bitcoin Risks” and “Announcement on Preventing Token Issuance Financing Risks” And other regulatory requirements, earnestly fulfill the obligations of customer identification, and must not provide products or services such as account opening, registration, trading, clearing, settlement, etc. for related activities.
On September 24, ten departments including the People’s Bank of China jointly issued the “Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Transactions.” The “Notice” clarified that virtual currency-related business activities are all illegal financial activities, and the provision of services by overseas virtual currency exchanges to residents of my country through the Internet is also illegal financial activities.
On the same day, the National Development and Reform Commission and other 11 departments jointly issued the “Notice on Renovating Virtual Currency “Mining” Activities”, reporting the monitoring and rectification of virtual currency “mining”, and deploying the next phase of work. The entire chain is comprehensive. Rectify the pattern of “currency speculation”.
“I can’t bear to participate in this crazy prosperity, either way. It seems to work well, everyone wants to squeeze in, and my attitude is different. I want to make money by selling people things that are good for them. Money, not something harmful to them.” Munger said, “People in the cryptocurrency business’don’t think about the customer, they think about themselves’.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/bitcoin-once-plummeted-by-20-at-least-400000-people-broke-their-positions-the-new-chinese-richest-man-lost-more-than-10-billion-net-worth/
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