The 500 billion yuan evaporated in January, and the production-reduction coins collapsed across the board. The "minsky moment" of the crypto market came?

US oil stocks have "collapsed" in the Saudi oil war, and have also "collapsed" global financial markets.

With mainstream currencies such as bitcoin, under the expectation of reduced production and the blessing of bitcoin "digital gold", investors have more or less ignored the negative impact of the two on the crypto market, and even believe that the collapse of the traditional financial market is in favor of it. With the development of the crypto market, gray rhinos are slowly coming under the paralysis. As an avalanche catalyst, the fear brought by Plus Token's running funds and mining disasters has exacerbated the severity of the situation.

As a result, we experienced a slump in Bitcoin from mid-February to early March. The price of the coin fell from a maximum of $ 10,500 to $ 8,400. We also encountered the second avalanche since March 8, and the price of the coin fell from a maximum of $ 9,200 to $ 7,600 .

At this point, Bitcoin has completed a round of deep callbacks in this round, with a range of 28%. As a result, the entire crypto market has evaporated more than 70 billion US dollars, equivalent to 500 billion yuan.

So when the gray rhinos of the financial market rush in, is the "Minsky moment" of the crypto market really coming? How long does the panic last? When the market says "Let's witness the return of Bitcoin to zero", what choice should you make?

1.When the gray rhino came running wild

"Gray rhino" is used to describe a potential crisis with a high probability and a huge impact.

The gray rhino is bulky and slow in response. You can see it in the distance, but you don't care. Once it rushes towards you, it will definitely catch you off guard and be thrown directly to the ground. It is not mysterious, but it is more dangerous. The Saudi oil war and the tumultuous U.S. stock market are two gray rhinos. When they rush towards us, no one can stop them.

It's another "Black Monday".

The market opened at 9:30 a.m. EST on March 9th. Only five minutes later, the three major stock indexes of Dow Jones, S & P 500 and Nasdaq all fell 7%, triggering a first-level fusing mechanism. Fusing means that the entire market needs to stop. Trading can only continue after 15 minutes-the three major indexes continue to decline after the opening, and fell more than 8% at the deepest day.

Three months after the "Black Monday" of the US stock market in 1987, the NYSE introduced a stock index fusing mechanism, divided into three levels, the first level is up to 7%, and the second level is up or down. At 13%, the third level is when the change has reached 20%. This system was set up for more than 30 years. The US stock market was triggered only once on October 27, 1997. On that day, the 30 Dow Jones Industrial Index plunged 7.18%, the largest single-day drop since 1915.

This was the biggest one-day drop since the "Black Monday" of US stocks on October 19, 1987, and it was the second time it touched the fusing mechanism.

U.S. stocks are entering a self-destructive model as if they were brought to global financial markets, including the cryptocurrency market.

However, a more serious problem than fusing is that based on the highest Dow index of 29568.57 points and the lowest of 23706.07 points on March 9, U.S. stocks have fallen by 19.8%, which is generally believed by financial markets that "U.S. stocks that fall more than 20% will enter a bear market The tragedy is just one step away.

Unlike US stocks, the stock index of other countries does not have a fuse mechanism, and the decline is even worse. For example, Athens ASE in Greece fell 11.86%, FTSE Italy AMB fell 11.51%, and French CAC40 fell 8.51%.

The Saudi oil war is the trigger of the US stock market's decline and triggering the fuse mechanism.

On March 8th, due to the disagreement between Saudi Arabia and Russia, OPEC chose not to extend production cuts, leaving the market to balance the relationship between oil prices and production.

At the same time, Saudi Arabia immediately launched a "comprehensive oil price war"-drastically lowering the pricing of its main crude oil at different levels, the largest reduction in at least 20 years, which means that it must increase production to seize the market and push as much crude oil as possible market.

Oil prices plunged 10% after hearing the news, and the Asian market opened on Monday and fell again by nearly 30%. People began to worry about the recurrence of the oil market crash in 2014.

It was the decline in oil that triggered a second round of U.S. stock market crashes.

Rystad Energy analyst Bjoernar Tonhaugen said that this was an unexpected development and worse than the worst case scenario we had expected, which would be the worst oil price crisis in history one. As Björr Natohogan believes, this is a completely gray rhino incident, and when this gray rhino crumbles towards us, no one can stop it.

The crypto market was overwhelmed by gray rhinos passing by, which is reflected in changes in the total market value of crypto.

The total market value of the crypto market fell from a maximum of US $ 307.8 billion on February 15 to a minimum of US $ 230.6 billion on March 9. As a result, the entire crypto market has evaporated more than US $ 70 billion, equivalent to 500 billion yuan.

When the gray rhino came unstoppable, the market began to have an extremely negative voice: "Let's witness the return of Bitcoin to zero". So, is the crypto market really going to be brought down to zero?

2. Is the "Minsky Moment" of the crypto market coming?

Minsky Moment refers to the economic phenomenon described by American economist Hyman Minsky, that is, the moment when asset prices collapse.

The detailed explanation is that when the economy is improving, investors tend to take more risks. As the economy continues to improve, the level of risk that investors take is greater. At this time, when the crisis suddenly comes down, due to excessive leverage Causes imbalanced revenues and expenditures to collapse. At this time, speculative assets prompted lenders to recover the borrowed money as soon as possible, which led to a greater collapse in asset value.

In the crypto market, the "Minsky Moment" has appeared on a small scale.

On March 9, the price of the Grin token fell, causing an investor's heavy position leverage to go long and sell out. During the closing of the position, the market was frantic, and eventually the Grin token fell by more than 95%. For the Grin token, This time is its Minsky moment. In other words, Minsky is always linked to economic phenomena such as collapse and collapse. So will the "Minsky moment", which is the recent phenomenon of "Let's witness the return of Bitcoin to zero" circulating in the currency circle, really appear?

Grin's spot price also collapsed

Such as the recent flight of funds from the crypto market, the abrupt halt in production cuts, and the fear brought about by crypto scams, people have reason to suspect that Minsky is coming.

First, the price of bitcoin, as a "hedging newcomer", has continued to slump recently. It has continuously crossed the two major barriers of $ 9,000 and $ 8,000, with the largest decline recently expanding to 25%. According to the Golden Fruit data, the digital asset market today had a net outflow of RMB 6.153 billion across the entire network, creating a new outflow within one year, and the capital fled quickly.

Secondly, the half-month production cuts that have been in full swing now have come to an abrupt end. The prices of BCH, ETC, and BSV, which are called "three treasures of production cuts," have fallen by more than 50%, 60%, and 70% from the highest, which takes almost half a month Time has gone through a round of bull market conversions.

In the end, PlusToken's running funds also continued. According to data from CoinHolmes, a digital asset visualization tracking platform owned by PeckShield, on the morning of March 5th, the funds on PlusToken's running funds 15pyB7 and 1Gc91z began to change again, and a total of 13,112 BTC was transferred to 15Z1sT and 1CkuKa. Address.

Cryptocurrency analyst ErgoBTC said the PlusToken team has been selling its digital assets in bulk since August 2019. In December 2019, PlusToken transferred funds to an unknown wallet. At that time, the transaction value was US $ 105 million, involving a total of 790,000 ETH. Since then, the total market value of cryptocurrencies has plummeted by US $ 12 billion.

Therefore, PlusToken's money laundering activities are likely to be directly related to the new round of plunge. It can be said that the transfer of funds by PlusToken has at least caused market panic.

However, if these factors can easily cause the entire crypto market to collapse, or even lead to the Minsky moment, then the crypto market may have collapsed. After all, bitcoin has been killed more than 300 times in history, a decline of more than 80% and no less than 10 times, but every time it can be safely. This time is no exception.

The most telling is the volume.

According to the latest data from coin360, the crypto market has plummeted in this round. Since March 5, the trading volume has set a historical record, with the highest volume on the day reaching 44 billion U.S. dollars. In other words, although the market fell sharply, a large amount of dips in funds stabilized the market.

Even in the stock market crash, Bitcoin and other crypto assets performed "fragile" and did not possess the same risk-avoidance properties as gold, but in extreme cases, Bitcoin will indeed exhibit local risk-avoidance properties.

For example, on March 27, 2019, the Turkish stock market plummeted 7%, the overnight swap rate soared to 1200%, and the exchange rate fell sharply. Turkey suffered a double-kill in stock exchange, but Bitcoin soared 15%.

In this regard, Zhao Zheng, a doctor of economics at Beijing Normal University, studied the phenomenon. Dr. Zhao selected the data and trading data of Bitcoin on 23 global exchanges from March 24, 2015 to March 23, 2017, compared 19 fiat currencies, and concluded that: The purpose of currency people is to cross borders. Of course, this is also one of the means of hedging.

However, in any case, the plunge in the crypto market is a wave of baptism for the entire industry.

A startling baptism

The generation of King Ant S9 was eventually shut down, which was the most direct consequence of the plunge in the crypto market.

According to the latest data from F2pool, when the electricity cost is 0.35 yuan / degree, the electricity cost of Ant S9 mining has reached 100%, and it is in a shutdown state. This means that the Antminer S9, which once produced 70% of the network's computing power and shipped millions of units, is about to withdraw from the historical stage.

Another disadvantage to Ant S9 is the increasing computing power of the entire network. The higher the computing power, the worse the profitability of mining under the same conditions.

According to the latest data from bitinfocharts.com, the current network computing power has reached 133.29 Eh / s, and the difficulty of mining has reached 13.1T. It is expected that the difficulty will increase by 7% after 12 days, reaching a historical high of 17.7T. By then, more miners will be eliminated.

The baptism of the mining industry can be said to be thorough, and the crypto market has not been soft on the bloodshed of contracts.

Just on the evening of March 8th, in the magnificent plunge of Bit, it fell by more than 10%, and the one-hour contract closed nearly $ 200 million, and the market value shrank by more than $ 11 billion. The mainstream currencies have all fallen by more than 10%, and the prices of mainstream currencies have fallen back to January levels.

The contract emperor's big data shows that on March 8th and 9th, the short position in 24 hours was 870 million US dollars, equivalent to more than 6 billion yuan.

It can be said that mining and traders suffered a bloody baptism in this plunge and suffered heavy losses. But isn't this the characteristic of the market, it won't go up all the way, let alone go down. There are black swans and gray rhinos in the upward process, and they have bottomed out during the decline. It is impossible to predict the rise or fall, but the only thing that can be determined is that the crypto market will not return to zero.

For investors, it is possible to survive in this young market only if they do not lightly "collapse", do not panic, and believe in logic.