Why is bitcoin plummeting now
the reaction of cryptocurrency to the Fed's interest rate increase shows that cryptocurrency is regarded as a safe haven investment against the background of the continuous dilution of the value of major legal currencies. That's why demand for bitcoin has risen in countries where fiat currencies have fallen, such as India and Venezuela
however, if the Federal Reserve continues to raise interest rates, the market demand for cryptocurrency may decrease. The reason is that when the Fed stops printing new money, there will be less new money flowing into assets such as real estate, stocks and cryptocurrency. As a result, investor demand for anti inflation assets will decline.
according to foreign media reports, on Monday, the price of bitcoin fell to $2526.4, with a maximum decline of 14.5%, which created the biggest decline since January 2015. A few days ago, the price of bitcoin just broke the $3000 mark, a new record, but then plummeted by more than 30%. As of the 16th of this week, the market value of bitcoin has evaporated $10 billion, almost equal to the market value of social software Twitter's $12 billion
the other reasons for the sharp decline include the sharp decline of US technology stocks and the poor outlook of investment banks on the special currency. Morgan Stanley said that "the virtual currency is like the currency of the wild west", which needs to be regulated before it can continue to rise. The previous price surge may be caused by speculation and not easy to sell
it is worth mentioning that bitcoin is not the only one that has plummeted. It is said that the prices of other digital currencies have also fallen considerably
there are risks in investment, so you need to be careful when entering
In the early morning of January 2, Beijing time, foreign media reported that at the beginning of the new year, the life of bitcoin has been difficult
this is the first time since 2015 that the cryptocurrency has opened a new year in the form of a sharp fall, further aggravating its decline since it hit a record high of $19511 on December 18
The surging trend of
has given birth to a variety of other cryptocurrencies, and also made bitcoin enter the wall street in the form of futures contracts. On December 18, the Chicago Mercantile Exchange launched for the first time a derivatives agreement that some traders thought would encourage short positions, and bitcoin peaked a few hours later
virtual is always virtual
There are many reasons for bitcoin's collapse. I think it is mainly because it has no government policy support, the conflict between cash bitcoin and virtual bitcoin, and the decline of public confidence in it. First of all, bitcoin is not supported by the government. It is not protected by relevant government policies. In China, the protection of the government is a big protective film. With policy protection, the impact of this slump will be minimized, and the government will share part of the pressure{ RRRRR}
in any case, there are a lot of reasons for bitcoin's collapse, and each has its own views
Oh my God, bitcoin has dropped by 4 percentage points. You said it didn't drop much. Are you kidding me? Don't you know that those stocks that fall or grow by a few thousandths are scared to death ? Because bitcoin is the same as those stocks, its market value is very large, so a few percentage points, even a few thousand points, will have great changes has dropped by 4%, which is a big crash. if you drop by 40%, you don't have to play. In other words, it's impossible to drop to 40%, and the bitcoin no longer exists
so I think we should look at the data in combination, and we can't just see that it has dropped by 4%, so we think that the 4% drop actually doesn't seem so much. When we buy clothes, we can get 20% off and 9% off, which is 96% off. But if we think about it, a piece of clothes costs several hundred yuan or several thousand yuan, but if you have a hundred million yuan, suddenly you drop 4%, then you will lose millions. So if we think about it in another way, the 4% is very much, because bitcoin has 21 million caps in total. In this case, 21 million caps, the value of each one is not low. In such a case, the 4% drop is very serious, so this behavior will be a big burst
in addition, the underlying reason is that the world does not recognize the monetary payment property of bitcoin, but regards it as an investment commodity similar to gold, and even has large-scale capital participation in speculation.
1. The continuous downturn of bitcoin and the decline of bitcoin price may keep some speculators away from the market, leaving behind a group of real bitcoin fans
2, the current bitcoin infrastructure can not support bitcoin market value, bitcoin infrastructure is still very fragile, bitcoin price has been fired to 8000 yuan, but speculation is still a concept, if prices do not slow down, there may be a big bubble, leading to the death of bitcoin.
3. The decline of bitcoin price can be accepted by more people, and the return to rationality of bitcoin price is more concive to the rapid development of bitcoin
if it's bad news, it's mainly based on the following reasons:
1. Falling prices lead to more people leaving the market. More people's positions will lead to the continuous decline of bitcoin prices. Some miners will carry out large-scale selling and cash out, thus forming a vicious cycle
2. With the continuous decline of bitcoin price, no killer application has appeared so far, and more people may lose confidence in bitcoin
3. The fall in the price of bitcoin may also cause investors to lose confidence in bitcoin and rece the financing for bitcoin start-ups, which may lead to large-scale collapse of some bitcoin start-ups
bitcoin home has more articles on bitcoin analysis. I suggest you take a look.