The price plummeted by 800 US dollars in 6 minutes, and 30,000 people liquidated their positions to 5 billion! Riot Blockchain and Marathon Patent Group have recently purchased mining machines from Bitmain, and Marathon has also purchased mining machines from competitors of Canaa

Source: China Fund News WeChat ID

Suddenly in the early morning! The price plummeted by 800 US dollars in 6 minutes, and 30,000 people liquidated their positions with 5 billion! What happened to Bitcoin?

Yesterday, Bitcoin once again exceeded the US$10,000 mark, US stock blockchain The enthusiasm for hyping the concept stock has also been ignited.

mining machine manufacturer Canaan Technology once rose by more than 50%, leading the rise in Chinese concept stock .

But near 11 o'clock in the evening, a "thrilling" scene occurred, and the price of Bitcoin plummeted by nearly 800 US dollars in 6 minutes.

At around 6:30 this morning, the price of Bitcoin was still hovering at US$9,500, with no rebound.

Unlike the sharp decline of Bitcoin, many Bitcoin concept stocks still closed up in the United States early this morning. Canaan Technology, which once rose by more than 50% during the session last night, closed up by 17.45%, and three other concept stocks rose by more than 10%. .

Bitcoin plunged 800 US dollars late at night after breaking through 10,000 yuan.

The entire network was liquidated with a liquidation amount of 5 billion.

At around 7 a.m. on June 2, Beijing time, the price of Bitcoin rose rapidly against the US dollar, breaking through 10,000 US dollars in a straight line.

This is the third time this year that Bitcoin has reached the 10,000 mark, the first time before the plunge in March. On May 8, as the "halving" approached, Bitcoin tested $10,000, but it did not stabilize.

Some market voices believe that the surge in the price of Bitcoin against the US dollar may be related to the protests in many cities in the United States. The protests have lasted for nearly a week. Trump has even threatened military suppression, and Bitcoin has the " The "risk aversion" attribute often manifests itself in times of crisis.

Yesterday, Bitcoin has maintained a volatile trend since it exceeded 10,000 US dollars in the early morning. After the US stock market opened, many Bitcoin concept stocks also began to rise crazily.

mining machine manufacturer Canaan Technology once rose by more than 50%, leading the rise in Chinese concept stocks.

Marathon Patent Group once rose by more than 30%, and Riot Blockchain once rose by 29.17%.

But near 11 o'clock in the evening, a "thrilling" scene appeared.

At 22:44 last night, the price of Bitcoin against the U.S. dollar reached a high of $10,147; and the price of Bitcoin immediately plummeted, hitting a low of $9,350 at 22:49, falling by $797 in just six minutes. , a drop of as much as 7.85%. Data from the

Bitstamp platform shows that Bitcoin hit a low of $9,141 near 23:00.

Ten thousand US dollars is an important resistance level for Bitcoin and an important "psychological threshold" in investors' philosophy. If Bitcoin performs weakly after breaking through the $10,000 mark, it will usually have a greater impact on market confidence.

analyst JOSEPH YOUNG said that when the price of Bitcoin fluctuated and fell after breaking through the $10,000 mark on May 8, it marked the "rejection" of a key resistance level, which made BTC vulnerable to a sharp correction. JOSEPH said that at that time, Whales (individuals who owned large amounts of Bitcoin) had moved quickly to sell Bitcoin.

According to Coin data, throughout the day on June 2, the liquidation amount of Bitcoin trading platforms across the entire network reached as high as 685 million U.S. dollars, approximately RMB 4.863 billion, setting a 30-day high, even higher than May 10. It is reported that on the morning of May 10, Bitcoin suddenly plunged from a high of US$9,559. 25 minutes later, the price of Bitcoin plummeted by more than 14%, and the liquidation amount that day was US$577 million.

The sharp drop in the price of Bitcoin around 22:49 last night "buried" many people at once, and one of the liquidated positions was as high as 10 million US dollars.

As of 1 a.m. on June 3rd, Beijing time, the amount of liquidated positions across the entire network in the past 24 hours exceeded 7 trillion U.S. dollars, equivalent to approximately RMB 5.111 billion, and the number of liquidated positions was around 36,000.

Bitcoin's "roller coaster" market also made many netizens sigh with emotion late at night. Some netizens lamented that "anything can happen in one day in the currency world and ten years in the world."

Some netizens were still feeling the Bitcoin bull market in the morning, but felt that the blockchain was a scam in the evening.

With the decline of Bitcoin, the rise of Bitcoin concept stocks has also narrowed. However, unlike the sharp decline of Bitcoin, Bitcoin concept stocks are still on the rise as a whole.

Canaan Technology closed up 17.45%, while Marathon Group, Overstock.com and Riot Blockchain all rose more than 10%.

What is the future trend of Bitcoin?

Market opinions are quite different.

Cointelegraph analyst Joseph Young said that for Bitcoin, it has never been easy to break through 10,000 US dollars.

Some analysts also believe that Bitcoin has been at the price level of 10,000 US dollars recently. It has been "rejected" many times. If it cannot be resolutely surpassed in the short term, it is likely to evolve into a more serious signal.

html At the end of May, analytics firm Glassnode warned that Bitcoin (BTC) could return to bearish territory if on-chain activity and overall market health continued to decline.

Recently, Goldman Sachs also issued a report saying that it does not recommend individuals to buy Bitcoin. Goldman Sachs believes that Bitcoin cannot be defined as an asset and is at best a security because it cannot generate cash flow and can only push up its price through buyers who are willing to pay a higher price. The investment bank’s consultants claim that they prefer Recommend traditional bonds, securities and other stable asset classes to clients.

And there are still many people in the market who are bullish on Bitcoin.

html May 22, JPMorgan Chase ’s latest Bitcoin analysis report shows that its research analyst Nikolaos Panigirtzoglou’s report believes that the current price of Bitcoin is about 25% lower than its intrinsic value, and it will rise in the short term and exceed $10,000. The probability is higher. The report looks at the intrinsic value of Bitcoin as a commodity and prices it based on the marginal cost of producing Bitcoin. According to the report, following the halving event, which saw the block reward reduced from 12.5 BTC to 6.25 BTC, Bitcoin was trading “25% below its intrinsic price.”

Recently, Raoul Pal, former head of Goldman Sachs' stock derivatives business and founder of Global Macro Investor, said in a podcast that in order to protect himself from the impact of the epidemic, he is transferring most of his wealth to Bitcoin. Lennard Neo, research director of Stack Funds, also told the media that investors’ interest in Bitcoin has increased recently, almost twice what it was before the plunge in March.

Cryptocurrency analyst Big Chonis Trading said, "The trading price of CME Group's Bitcoin futures is nearly $100 higher than the spot Bitcoin price. This is a clear bullish signal. The wider the price difference, the more bullish the market is."

Glassnode's Data analysis shows that nearly 60% of the Bitcoin supply has not been traded in the past year, which may also be a "hold" signal released by investors in terms of expected returns.

Canaan Technology's share price was halved due to short selling.

The stock price fell for 9 consecutive trading days before the sharp rise.

Investors' expectations for the price of Bitcoin have a great impact on the trend of Bitcoin concept stocks. In April this year, affected by expectations of rising Bitcoin prices, mining machine manufacturer Canaan Technology rose 70.39% that month.

Some investors who are cautiously pessimistic about the future trend of Bitcoin have also begun to short Bitcoin concept stocks, and Canaan Technology is one of them. Recently, Canaan Technology has been shorted by the research organization White Diamond Research. The institution is not optimistic about the future trend of Bitcoin and believes that Canaan Technology's mining machines are not efficient in mining.

html In mid-May, the pair issued a short-selling report on Canaan Technology, saying that Canaan Technology currently has problems such as low profit margins on mining machines, failure to transform its AI chip business, and unreasonable market value.

Before the report was released, Canaan Technology’s market value exceeded US$800 million, and the report believed that between US$100 million and US$200 million should be a reasonable valuation range for Canaan Technology. The report predicts that Ghana Technology has room for a 80%-90% decline, and the price per share should be less than $1.

After the report was released, Canaan Technology fell 26.47% on May 15, U.S. time. On the second trading day after the sharp drop, Canaan Technology rebounded weakly, rising only 1.37%, and then started falling for nine consecutive trading days.

In addition, Canaan Technology released its first quarter 2020 financial report on May 22. The financial report shows that Canaan Technology's total revenue in the first quarter was 68 million yuan, a year-on-year increase of 44.6%; the net loss was 40 million yuan, compared with 68 million yuan in the same period last year, and the net loss narrowed year-on-year. The eye-catching financial data did not reverse Canaan Technology's decline. This may be because Canaan Technology's profit fluctuations are linked to the price of Bitcoin, and the market has long expected its financial status.

On June 1, US time, Canaan Technology closed at US$2.12, which has dropped 64.67% compared with the high of US$6 on May 14.

The report demonstrates the conclusion that "Canaan Technology's stock price is overvalued" from the following perspectives.

First of all, the report believes that Canaan’s current core business is the sale of Bitcoin mining machines. Apart from this, it has no other important business and no other recurring software revenue. The only "other business" owned by Canaan is artificial intelligence chips, but this business's revenue in 2019 was only 2.7 million yuan (approximately US$390,000), accounting for 0.2% of its total revenue. It is clear that Canaan's artificial intelligence chips cannot compete with industry leaders NVIDIA and AMD.

However, Canaan Technology’s only main business is facing a certain crisis recently. The report pointed out that given the current Bitcoin price and the electricity bills required to run mining machines, miners using Canaan’s smart mining machines may be unprofitable.

"Not only that, with the recent halving of Bitcoin memory block rewards, Bitcoin miners' profits from mining will also be "discounted in half." For those miners using Canaan Mining Machines, now every day of mining That’s a loss of $1.”

The report also quoted Bitcoin mining expert Drew Vosk. Drew Vosk said that the latest mining machine from Canaan Technology is priced at $999. Although it has good functions and performance, it is professional. It has the advantages of packaging, stable operation, etc., but the mining efficiency and profit margin are not high. Unless the miners can get very low electricity prices, profits will only be possible when the price of Bitcoin rises sharply.

Second, the report believes that it will be difficult for Bitcoin prices to rise sharply in the future, which may cause Canaan Technology to once again face the situation of selling mining machines at a loss.

The report also pointed out that Canaan’s company performance is highly correlated with the price trend of Bitcoin, but they have not developed their own mining business like Bitmain , and they do not hold any Bitcoin, and their income source is only Mining machine sales. Once the sales of mining machines become unprofitable, Canaan can only sell the mining machines at a loss, which is one of the reasons why their gross profit margin became negative in 2019.

Due to pessimistic expectations for Bitcoin prices, White Diamond believes that Canaan Technology’s stock price will fall.

The report mentioned that the real reason for the skyrocketing price of Bitcoin in 2017 was not from the "halving", but from the crazy speculation of investors; but the current market environment is very different from that in 2017, because Bitcoin Investors have become mature enough, so many people believe that the possibility of a significant price increase after Bitcoin's third "halving" in history is unlikely. On the other hand, the current price of Bitcoin is still suppressed by speculation, and there are not many practical applications for using Bitcoin to purchase goods and services.

The report pointedly pointed out that even if the price of Bitcoin rises sharply, there is no 100% guarantee that Canaan Intelligent Technology will be profitable.

Third, after investigating public data, the agency found that many Bitcoin mines did not purchase Canaan Technology’s AvalonMiner mining machines. Riot Blockchain (RIOT) and Marathon Patent Group (MARA) have recently purchased mining machines from Bitmain, and Marathon has also purchased mining machines from a competitor of Canaan Technology (not Bitmain).

Fourth, White Diamond believes that Canaan’s senior management team lacks experience. The report stated that Canaan’s senior management team is relatively young, mostly around 30 years old, and lacks industry and business experience.