"Bitcoin has fallen by more than 20%, and it has happened only a few times in history. The last plunge dates back to March 12, 2020. My memory is deep, and it feels as if it was yesterday."
This is one of the hottest passages today.
How did it plummet? And halved directly! Many people gradually believe: must be the bookmaker frantically hit the market in the spot market, and then profit from short orders in the futures market? Perfect harvest.
- Data Report: Bitcoin search exceeds stocks, and Dapp trades over $3 billion.
- Bitcoin extortion, revealing underground rivers and lakes that you don’t know
- Buy Starbucks with Bitcoin and hit Uber, this lightning network payment app will do it for you.
- Depth | Beyond 2020: BTC Fundamentals Analysis
- Mysterious Nakamoto Satoshi, the legend of creating Bitcoin
- Bitcoin's short-term bulls are weak, the daily line still has the risk of retracement
Is it really so?
Bitcoin plummets, do you believe these reasons?
Dovey (Wan Hui), founding partner of Primitive Ventures, posted on Weibo. She summarized 5 reasons.
1. The early giant whale sold off, and many hardcore players from 10-11 years sold coins in preparation for the Great Depression.
2. Consecutive liquidation of leveraged contracts has led to a liquidity crisis. There is no fuse, no central mom, and the price can only be adjusted by the physical body of the market.
3. The price anchor USDT cannot be elastically supplied, and the legal currency deposit and withdrawal channels are blocked, which may happen next.
4. The liquidation of the miner's pledge is mandatory.
5. Systemic risks of the exchange.
Let's analyze one by one what Dovey said.
Contracts are sold out in a series, which means that due to the short-term plunge, most of the long accounts are forced to close out, selling Bitcoins, closing down the spot price again, and then causing more long positions.
The channel for depositing gold is like a channel for conveying fresh blood. Once it is cut off, there is no money in the market and it cannot accept the sell order. Many people should have experienced these two days. Taking Huobi as an example, the USDT price has skyrocketed to $ 8 in a short time, and there are few sellers. It is also difficult for you to buy Bitcoin. Many people's long orders are close to the strong closing price, but they cannot quickly raise enough USDT to cover the position and increase the margin, and then they are forced to close the position.
BlockVC founder Xu Yingkai posted a picture on Weibo. The screenshot shows that at a certain time, the BTC price of Coinbase Pro made by the US dollar was 5559.98 US dollars, and the Huobi global station with USDT as the deposit and withdrawal, the BTC price was 4451.31 USD, the spread reached $ 1,000.
"It's really been a long time since we saw that the price difference between fiat currency exchange and currency exchange can be so huge and the market is so ineffective. It is too difficult to lose money or lose money in such a market," he said.
This is most likely due to a problem with the USDT deposit and withdrawal channels and lack of liquidity, which has caused prices to fall wildly. However, QKL123 analyst Liu Qing believes that it is not ruled out that the exchange system is stuck or the data is stuck.
The fourth reason is related to miners. Since 2019, mining has not only entered a centralized and specialized stage, but also entered a large-scale financialization stage. For example, miners pledge the bitcoin they have dug to a third-party institution in exchange for USDT or fiat currency to purchase a mining machine or build a mine. This kind of leverage is less risky when the currency price is stable. However, in this round of plunge, when the price of pledged Bitcoin is lower than the price of its pledge, it may be forced to liquidate by the platform. This also strengthened the power of hitting the plate.
Fifth, systemic risks of exchanges. At this point Wan Hui did not specify what it was.
However, Weibo's big VTumbleBit mentioned that many mortgage loans, including the exchange's hedging positions at Bitmax. He believes that the exchange carried out derivatives operations with the user's currency.
In response to this problem, FTX COO Constance Wang believes that from the value of Bitmax's final liquidation orders, most of them are retail investors. Of course, this cannot be said to have no organization at all. But we cannot add the charges of serial explosion to the organization.
Xu Yingkai further posted on Weibo that everyone may understand that the plunge came from leveraged borrowing and debt crisis, but who is responsible? From miners, miners, mines, exchanges, investors, borrowing tools, etc., everyone is driving this tragedy to the last. This is a social experiment, this is a collective "collusion" ".
Wan Hui believes that on the evening of the 12th, the Federal Reserve ’s liquidity support of US $ 1.5 trillion brought the market back to life for 10 minutes, and the broader market fell nearly 10% during the trading day. In fact, the market is not short of money, but lacks confidence. Bitcoin's plunge is also a liquidity crisis.
FTX COO Constance Wang analyzed in an interview with Babbitt. In fact, the plunge can be divided into two stages. The first stage is probably from 9000-6500. This is largely due to the impact of the large environment, including the meltdown of US stocks, and the impact of new crown pneumonia on the macro Economic impact and the resulting panic. The second stage is the 6500-3800 stage, the main reason is the serial burst.
Constance Wang believes that serial liquidation is not a novel phenomenon. It has happened before, but this time when various factors are mixed together, it causes a very large impact and panic .
At present, as Bitcoin has rebounded strongly to around $ 5,000 after hitting $ 3,800, the market panic has improved, but is this the case? Maybe not.
This round of bitcoin's plunge has opened a Pandora's box, which not only reflects insufficient liquidity, but also reflects that, at least in the cryptocurrency world, systemic risks may really exist.
For example, DeFi is the first to bear the brunt. At present, if ETH falls further, for Maker DAO, they will be like BitShares in the past, and most of them will manage the auction of tokens to repay the bad debts that are insufficiently mortgaged. It is reported that MakerDAO had a surplus of more than $ 500,000 before the price fell, and is currently in debt of more than $ 4 million.
This is one of them. I believe that because of this plunge, there may be some serial reactions gradually exposed. What effect they will have on the market can only be seen.
Miners are in a circle, but many people are still buying bottoms and waiting
Obviously, the plunge is a nightmare for Bitcoin mining. According to the official website of Yinyin, at the rate of 0.38 yuan per kilowatt-hour, except for the latest Antminer S19Pro, other Bitcoin mining electrical and mechanical expenses account for more than 50%. Many mainstream mining machines have entered shutdown time. Among them, the ant mining machine S9, which accounts for about 40% of the entire network computing power, has announced its retirement.
Is the mining escape coming? Babbitt interviewed several mining miners.
Mining from the media, the bitcoin miner's blockchain mine said that his machine had not been shut down except for the ant S9 shutdown. However, some customers' machines in the mine have been shut down, and the customers have to wait and see for a few days.
" We will make a comprehensive observation based on the difficulty of computing power and the price of electricity . We will look at the situation at the critical point of shutdown and take a step forward. We will also withdraw funds to ensure liquidity. " He said.
He believes that the current environment is not very beneficial to mining in the short term, but if the global epidemic can be controlled within a month, there will still be a wave (up) of probability before halving. "Take it as far as you can, this is also the darkness before dawn."
Jiejie Mining CEO Liu Jian said that no machines have been shut down for the time being, including some machines that have reached the shutdown price. "Try it for a few days, stick to it for 10 days, and wait and see. There are no real-time measures now. If there is no rebound, most people will die in 2-3 months. Many people lost sleep last night."
In addition, she mentioned that, as a mining machine distributor, she felt that the mining machine could not be sold at all, and now many people are stunned and do not know how much the mining machine should be sold . But she said that there are many people who are buying bottoms, and she has prepared some funds to buy mining machines.
The situation of Wang Dongwen, the founder of Jinshan Mining, is basically similar to the other two. He is also more concerned that this plunge will affect the perceptions or plans of new participants. And he also believes that the currency can be held well on the field, the opportunity to participate in the off-market selection, and so on in the future.
The founder of BitBlue Whale Chen Lei introduced that about 60,000 mining machines in his four mines have been severely affected. High-power machines have reached the shutdown price. Some hosting machines have been opened or temporarily adjusted according to customer requirements. Some cloud computing power platform customers generate customer complaints to deal with, and some customers who have not experienced this plunge are very anxious.
"It's definitely not the hardest time now. The market will intensify the worry. Bitcoin may also be further affected. Players who need cash flow will be harder. The impact of the halving cycle may be very difficult. But This is the market normal. Players come and go. The industry is gradually upgraded during ups and downs. Players with rich risk control methods, sufficient cash flow reserves, and low leverage pressure will be safer, but from another perspective, the industry's cash flow is tight. "When the transaction is sluggish, it may be time to be in danger. It is hoped that Bitcoin will hold the $ 3,000 mark. " He said.