"Blood loss" and "Pulse down" have become the norm in the currency circle recently.
"The group fell so much that they didn't speak much. Everyone was dead, and there was no one who posted emoticons." Fang De (pseudonym), an investor in virtual currency .
"A few negative lines are coming down, but I can't afford to pay social security." This is a joke that has been widely forwarded in the circle of friends in the cryptocurrency circle recently.
Bitcoin fell for several days, falling below the $20,000 mark, setting the lowest level since December 2020. Binance data shows that as of 5 pm on June 15, the price of Bitcoin was $20,470, down nearly 10% from the previous trading day.
virtual currency market is shocking
"On the virtual currency trading interface, all coins are falling, which is particularly dazzling." Fang De lamented and closed the trading software.
stretches the timeline, since setting a historical high of $68,928.9 in November last year, Bitcoin has entered a volatile downward channel, and the decline has exceeded 70% so far. This means that if investors buy 3 bitcoins at the high of the end of last year, they will lose nearly one million yuan.
Image source: Binance
As of 17:00, in the past 24 hours, a total of more than 90,000 people in the entire network of virtual currency have been liquidated, with the total amount of liquidated stocks reaching US$290 million (about RMB 2 billion).
Image source: Coin World
The market has different opinions on the reasons for the decline. Ouyi Research Institute pointed out that there are many factors that affect the recent market downturn. One of the main factors is that the US CPI index released last week hit a 40-year high, exceeding market expectations. This means that the previous Fed rate hike did not meet the expected inflation suppression target. It is likely that the June meeting of the Fed Fed held this Wednesday will not only insist on monetary tightening, but also the hike rate hike will have further radical potential on the expected 50 basis points. Rate hikes mean capital outflows for the virtual currency market, and the continuous decline in the currency price is reflected. The second factor is that an institution exploded and sold a large number of stETH coins (stETH is "Lido Stake Ethereum", a project that specializes in providing users with Ethereum liquid staking services), resulting in a plunge in the price of Ethereum coins, which in turn triggered a series of collapses.
Co-director and researcher of the Digital Economy and Financial Innovation Research Center of Zhejiang University International Joint Business School Pan and Lin said that according to the drawdown ratio, it is not uncommon for virtual currencies to pull back sharply in history. However, from the perspective of macroeconomic , this Fed rate hike fundamentally undermines the underlying logic of virtual currencies. "If we cannot survive the strong US dollar cycle this time, cryptocurrencies are likely to be submerged in the long river of history."
7 cryptocurrency giants lost US$114 billion
The slump in the virtual currency market has also caused the wealth of cryptocurrency giants to shrink.
According to the Bloomberg Billionaire Index, since Bitcoin reached a record high of nearly $69,000 on November 9 last year, and on June 14 this year, Bitcoin fell to a new low since December 2020. The wealth of seven billionaires in the cryptocurrency field, including Binance Exchange founder Zhao Changpeng , FTX exchange founder Sam Bankman-Fried (SBF), and Brian Armstrong of Coinbase Exchange, etc., has shrunk by a total of US$114 billion.
Image source: Bloomberg
Among them, Zhao Changpeng, known as the "richest man in Chinese", lost US$85.6 billion, or approximately RMB 577 billion in about half a year. According to the Bloomberg Billionaire Index, Zhao Changpeng's wealth evaporation has ranked first among all wealthy people this year.
In addition to individual investors, there are also countries who suffer losses in investing in virtual currencies.
In September 2021, El Salvador became the first government in the world to make Bitcoin a fiat currency. According to a statement by El Salvador President Naibu Bukel on social media, his government has spent about $105 million to buy bitcoin since making bitcoin a fiat currency last September.
But since its first purchase, Bitcoin has fallen 45%, bringing the value of the 2301 Bitcoins held by El Salvador to about $58 million, or a floating loss of about $47 million.
The world's largest virtual currency trading platform announced a layoff of 18%
In the early morning of June 15, Beijing time, Coinbase, the world's largest virtual currency trading platform, issued a major layoff announcement, which made many investors feel that winter is approaching.
Coinbase CEO Brian Armstrong issued a letter of full staff announcing that the company will lay off about 18% of its employees to reduce administrative expenses and improve efficiency.
Image source: website
Brian Armstrong said that the current economic situation in the United States is changing rapidly and seems to be entering a recession. The recession may lead to a bear market in virtual currency and may last for a long time, with significant declines in future virtual currency trading revenue (the largest source of income). The cost of managing in a downturn market is crucial, and Coinbase has grown too quickly before.
Brian Armstrong said in the announcement that employees affected by the layoff plan will receive a notice from the Human Resources Department within 1 hour. At the same time, Coinbase will cut off access to the company's system by laid off employees. Armstrong "Although deleting access may feel sudden and unexpected, it is the "only feasible option" to ensure that "individuals will not make hasty decisions that harm the company." After the news of "large layoffs" of
, Coinbase's stock price plunged on the 15th, down more than 5.53% as of 17:00 p.m. The stock price has fallen by 80% year-to-date.
's first quarter financial report shows that the company added 1,218 employees in the first quarter. On May 16, Coinbase's internal employees' letter It also said that the company plans to triple the number of employees. According to industry insiders, Coinbase has expanded rapidly and has been over-employed. Since June, Coinbase has completely stopped its recruitment plan.
At the same time, the "currency bank" Celsius announced that it had frozen withdrawals and transfers due to "extreme market conditions", which shocked the market.
On June 14, Celsius said: "The platform business is still operating, and the ultimate goal is to stabilize liquidity and resume transfers between withdrawals, transactions and accounts as soon as possible. "But when considering restoring various options services, there is still a lot of work to be done, the process takes time and may also be delayed.
Since October last year, the asset value of Celsius has shrunk by more than half, and at that time, Celsiu's management scale exceeded US$26 billion.
Co-chair of the Blockchain Committee of the China Communications Industry Association Yu Jianing told reporters that after this impact, the ecology of the virtual asset industry will inevitably undergo a huge change, and the content hierarchy ranking has been greatly reshuffled. "Just like the traditional financial market, the cyclical cycle of the virtual currency industry can be roughly divided into four stages: recovery period, overheating period, recession period and stagflation period. "
Yu Jianing further analyzed that during the recovery period, the core trading assets are Bitcoin. When the overheating period is reached, Bitcoin will retreat to the second line, and new assets will start to perform. The recession period is a very fast and violent process. When entering the recession period, there will be severe stampede by traders. The stagflation period is the most difficult and painful stage, and it is also a key node for the emergence of new applications. "The current stage we are in is a recession period where capital outflows, asset prices decline, and emerging assets collapse in large quantities. ”
Editor: Li Ruoyu Zhang Jing
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