As a newly launched novelty, bitcoin has supported its rapid development by stimulating the adrenal hormone of industry investors. Killed or favored by so many countries, bitcoin investors have been confused and enthusiastic. The highly controversial bitcoin, once again, has faced several crises. Will cryptocurrency become an effective means of coverage? No matter what the answer is, it has been seriously affected now. In just 7 days, the price of bitcoin fell by over $ 1,700, down 30%.
Fall, fall and fall, where's the bottom?
On November 14th, the bitcoin price remained around $ 6,400. But last week, the price fell 38%. At 4:30 BJT on November 21st, the bitcoin price on the Coinbase platform fell below $ 4,100, the lowest level for 13 consecutive years. On the morning of November 25th, the bitcoin, once again, recorded a significant short-term drop of 14% to almost $ 3,800, a historic low from September 2017. At about 6.30pm the same day, it fell even below the $ 3,500, a historic low since August 2017. In December, last year, cryptocurrency peaked at over $ 19,000. However, from the beginning of the year to today, the bitcoin has plummeted from the peak of 80%.
According to the Bloomberg analysis, given the competition between currency circles and chaos on stock exchanges, there has been greater vigilance by the authorities. The US Department of Justice has begun investigating suspected cases of bitcoin manipulation at the end of last year. Apart from this, the declaration on the issuance and trading of digital asset securities issued by the US SEC could also have contributed to the fall in the price of bitcoins.
Stephen Innes, manager of Pacific Asia's trading in Oanda, told Bloomberg that the price of bitcoins will range between $ 3,500 and $ 6,500 in the coming days, but currently has not yet fallen.
The rising wind anticipates the coming storm
The repeated drop in the price of bitcoin at the national level is simply an epitome of the digital currency market. According to CoinMarketCap, among the top ten cryptocurrencies in the world, BCH, XLM, XMR and ADA have fallen by more than 10% in the last 24 hours. Only in the last week, 73 of the top 100 digital currencies in the global market value fell by over 30%. Furthermore, the number of cryptocurrencies in the world has started to decline slightly, and the total value of the digital currency has fallen dramatically over the last two weeks.
Other data show, as of 18 November 2018, there were 2,081 global encrypted digital currencies. The number of encrypted digital currencies has continued to decline slightly in recent months, while in the exchange market the number has continued to increase to around 16,000. In terms of bitcoin, its downward trend has a domino effect, affecting the market for chip makers, mining pools and mining machines. His players and speculators suffer a lot.
Firstly, the price of companies' shares in the cryptocurrency market has been declining recently, without exception for NVIDIA and AMD, video card providers for Bitcoin minors. In addition, mining pools inevitably suffer from the disaster caused by the arrest. On November 6, China's oldest bituminous pool, the BTCC, said in its press release that the BTCC pool will close all mining servers on November 15 and cease operations indefinitely starting November 30.
Apart from this, the bitcoin mining machines have triggered the "mining disaster" while the price plummets. Many small and medium-sized mines have no choice but to resell mining machines, leaving barely the cost of investments. According to a report, the mining machine was priced at RMB 20,000 a year ago, now only worth around RMB 1,000 at a second-hand price. Partial mine mines in small bitcoin mines are piled up like small mountains and even sold at the price of scrap metal.
Thousands of bitcoin players and speculators have suffered too much. Some senior players have announced on platforms like Microblog, WeChat Moments and Bitcoin Forum that went bankrupt after losing over 85% of their business. Some of them, for example, contain only 2,000 of the original 100,000 bitcoins.
The collapse of Bitcoin indicates that the investment in virtual currency is losing popularity
Presented after the 2008 financial crisis, the concept of encrypted digital currency was based on the idea that the traditional financial system based on trust was not valid. The bitcoin creation process is similar to "mining"; similar to the exploitation of precious metals; and businesses devote a lot of capital to refining gold from the earth. In the world of bitcoin, "mining" means that you should first invest a large sum of money in computer hardware and then compete with other "miners" to solve a complicated mathematical problem via computer. The Bitcoin project also stimulates that the number of exploited bitcoins is limited to 21 million at most. The limited supply in the future determines the current price of bitcoins, so does the difference between supply and demand.
So, what caused the last bitcoin market crash?
Rome was not built in a day; in the same way, the bitcoin crisis was not due to a single factor. Basically, the bitcoin market is a capital market and the size of the global digital currency market is quite small. If the large capital holder hits the market, the price of the currency will fluctuate sharply.
As far as industry is concerned, the blockchain infrastructure is not solid and the blockchain project deals with severe bubbles. Professionals who continue to increase market expectations now suffer a severe blow, and the trust of people in the bitcoin market is severely affected. If we refer to the explosive fuse, the recent HashRate sector war has shaken the confidence of some people and aroused fear, causing market fluctuations; and the BCH bifurcation, a direct competitor of bitcoin, should take the due responsibility.
Furthermore, the correlation of bitcoins with the currency has not yet been legally recognized and has poor performance in terms of pressure and market crisis. According to the relevant regulations formulated by the PBoC, Bitcoin, not issued by the monetary authority, is not the currency in the real sense, without mandatory and compensatory currency attributes. And by its nature, it is a specific virtual commodity and does not have the same legal status as the currency. Thus, it can not and must not circulate in the market as a currency.
In addition, some people absorb funds through concepts such as "virtual currency, virtual asset and virtual asset", PBoC and relevant regulatory departments, once delivered articles to request the suspension of all types of tokens from insurance and financing, reminded the public of to treat the blockchain rationally and defend the right-wing currency and investment concept. As a result, as countries such as China have strengthened the virtual currency regulatory policy such as bitcoin, and the bitcoin regulatory arbitrage space has been further compressed, which has further undermined investor confidence in the currency. industry.
When will Bitcoin find its way out?
Back in 2014, Warren Buffett warned that we should move away from the bitcoin because it is only an illusion. This May, Buffett said again, in an interview, that the bitcoin was more toxic than rat poison. Are not you surprised at what the players and miners in the circle of bitcoins will think when they see Buffett's initial warning?
Bitcoin buyers who hold this type of digital currency expect the price to rise. However, the whole bitcoin system remains to be tested, so the investment is equal to the experiment. Therefore, digital money belongs to a high-risk sector, whose value remains to be understood, regulated and managed. There is still a long way to go before virtual currencies become traditional currencies.
Hence the questions of: what are its survival prospects of bitcoin; It will rebound after touching the bottom or withdraw from the historic arena; If its development will gradually return to the right path after so many people fail and become rational towards investment; they are creating a feeling of fear and uncertainty among the people.
The future is unpredictable. But where there is profit, there will be some followers, and this is a strict law.
As shown in The capitalonce there is an appropriate profit, people gather their courage to pursue it. If the profit represents only 10%, it will become accessible; if it rises to 20%, it will become popular; if it amounts to 50%, it will be used regardless of the cost. If it rises to 100%, it will guide the hot and reckless pursuit of people. If it reaches 300%, people venture out to commit crimes, even at risk of gallows.
As the old proverb says, where there is a risk, there is a possibility. Today, when the price of bitcoin falls downstream, not a few people, I fear, are waiting for the opportunity to seize the opportunity. As far as we know, today, there are still some people trying to make money by investing in mining machines. For them, they are waiting for an increase in the price of the currency, and they hope that after surviving the winter, they will embrace spring.
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