The price of Bitcoin fell below $18,000 on June 19, hitting a new low in the past two years. Even so, this is still far behind the record high price of nearly $69,000 last November.

| Xing Meng

Recently, Bitcoin is suffering from a serious crisis of trust.

Bitcoin price fell below $18,000 on June 19, hitting a new low in the past two years. On June 20, the price of Bitcoin rebounded slightly to $20,000. Even so, this is still far behind the record high price of nearly $69,000 last November.

At the same time, in the past week, many virtual currency lending platforms and trading platforms such as Celsius announced the suspension of Bitcoin withdrawals, exacerbating market panic. A large number of investors have sold off, and the "trampling effect" has emerged.

As an emerging alternative asset, Bitcoin has been held by many overseas investment institutions for a long time. Whether the Bitcoin crisis will further transmit risks to the global economic system has attracted much attention from the market.

The price of Bitcoin may fall further due to the impact of the Federal Reserve's interest rate hike

For Bitcoin, which has skyrocketed and plummeted, the recent decline has not been large, with a weekly decline of about 11%. The industry believes that the reason why this wave is regarded as an "extreme market" is mainly because it broke through investors' psychological defense line against the price of Bitcoin-20,000 US dollars.

In mid-December 2020, the price of Bitcoin exceeded US$20,000 for the first time, completely igniting investor enthusiasm., thus starting a year-long surge mode, and in November 2021, it once approached US$69,000, setting a record high. price . entered in 2022, and the market took a turn for the worse. The price of Bitcoin fell all the way and fell below 20,000 US dollars on June 18. broke the psychological defense line of investors. Massive selling prompted the Bitcoin price to further fall below 18,000 US dollars on June 19. $.

Regarding the reasons for the decline in the price of Bitcoin, Yu Jianing, co-chairman of the Blockchain Special Committee of the China Communications Industry Association and president of Huoda University of Education , believes that it is mainly closely related to the global financial market. He told a reporter from Securities Daily that the current market is in the midst of the Fed's interest rate hike phase, and the U.S. CPI is high, which means that the Fed's previous interest rate hike policy has not effectively alleviated domestic inflationary pressure. In the future, it may More radical policies will be adopted. There are still great unknowns about the number of subsequent interest rate hikes by the Federal Reserve, adjustments to benchmark interest rates, and the scale of balance sheet reduction. Global financial markets have been challenged, and Bitcoin has been affected as well.

"The prices of many mainstream crypto assets are still reflected by stablecoins anchored to the US dollar. They are greatly affected by US dollar policies and the US market. To some extent, they can be regarded as secondary markets for mainstream trading markets such as , US stocks, , etc., such as this Bitcoin The currency’s plunge was affected by the risk of a U.S. economic recession, which was transmitted to the crypto asset market,” Zhao Wei, a senior researcher at Ouyi Research Institute, told a reporter from Securities Daily.

“Affected by the Federal Reserve’s interest rate hikes, as crypto-assets with high volatility, Bitcoin and other virtual currencies are susceptible to market panic and are sold off.” Review expert of major industrial Internet blockchain projects of the Ministry of Industry and Information Technology, Metaverse Industry Collaboration of Beiyou Science and Technology Park Chen Xiaohua, executive director of the Innovation Center, told a reporter from Securities Daily that judging from the overall tone of the global investment market, Bitcoin has not shown a clear signal of recovery, and the price may drop further.

virtual currency market software Feixiao App shows that as of 5 p.m. on June 20, the latest price of Bitcoin rebounded slightly to US$21,000, the circulating market value of reached US$393.7 billion, and the 24-hour transaction volume reached US$23 billion. "Bitcoin is in a state of oversold in a short period of time, and a shock and rebound is a normal market fluctuation." Zhao Wei said.

Yu Jianing believes that Bitcoin’s current rebound is a restorative rebound after the plunge, but it does not mean that the market trend has reversed. If the Federal Reserve adopts more stringent interest rate hikes to curb inflation, it may follow a further downward trend.

Institutional selling is on the rise

Lawyer Ding Feipeng, a partner at Beijing Lantong Law Firm, told a reporter from Securities Daily that the market performance this year has confirmed that Bitcoin has never been the so-called "digital gold" or a safe-haven asset. As a specific virtual commodity, virtual currencies represented by Bitcoin have always had high risks.

At present, Bitcoin, which continues to weaken, is being sold by more and more investors, and the capital flow of large currency holders is accelerating. The non-small app shows that as of June 20, in the past 7 days, 4 addresses among the top 10 mobile Bitcoin addresses have had a net outflow of 56,000 Bitcoins. Calculated at a price of US$20,000, the outflow amount exceeded 11 One hundred million U.S. dollars.

“With the gradual decrease in prices, some institutional investors have entered the stop-loss stage.” Yu Jianing told reporters that in the crypto asset market, the proportion of institutional investors is increasing day by day and has become an important participant. At the same time, the holding costs of many institutions are not low. For example, the holding costs of institutions such as Nexon, which entered the market later, reached nearly 50,000 US dollars.

The industry believes that the collapse of the virtual currency market represented by Bitcoin will not have an impact on global economic development. Yu Jianing said that on the one hand, the total market value of the crypto asset market is less than one trillion U.S. dollars, and its size is relatively small, making it difficult to affect global economic development. On the other hand, the connection between the crypto asset market and the traditional financial market is relatively weak, and it is unlikely that its fluctuations will spread to the real economy.

picture | Baotu.com production | Zhang Xin editor | Sun Qian

review | Zhu Baochen final review | Zhang Xin