The "currency circle" has shaken again, and Bitcoin once fell below $19,000, and over 130,000 people exploded their positions!

 

Recently, the "currency circle" has reappeared in shock.

 

　　On September 19, the price of Bitcoin fell below the $19,000 mark again intraday. Its price has fallen nearly 70% from its all-time high of $67,800 in November 2021.

 

　　Bitcoin falls below the $19,000 mark intraday

 

　　On September 19, Bitcoin dived again in intraday trading, once falling below the $19,000 mark, and the lowest fell to $18,215. At the same time, Ethereum also briefly fell below the $1,300 mark to $1,276.61.

 

　　However, as of press time, the declines of Bitcoin and Ethereum have both narrowed, with Bitcoin down 2.45% to $19,301.70, and Ethereum down 4.47% to $1,355.26.

 

　　According to Coinglass data, in the past 24 hours, a total of 133,004 people were liquidated, with a total liquidation of US$443 million (equivalent to RMB 3.1 billion).

 

　　Affected by the shock of the "currency circle", after the US stock market opened, blockchain concept stocks generally fell, Marathon Digital and MicroStrategy fell by more than 3%, Riot Blockchain and Canaan Technology fell by more than 2%.

 

　　"Bitcoin is also a risk asset"

 

　　Glassnode data shows that the active addresses of bitcoin transactions have hit a new low this year, and the transaction activity of bitcoin is heading towards the bottom range of this year, and the number of people paying attention is gradually decreasing.

 

　　"I don't want to open the APP anymore." Xiao K, a virtual currency player who has been in the bitcoin market for nearly 4 years, told reporters, "All the money I made before is lost."

 

　　As a "former" IT practitioner, Xiao K has long been exposed to virtual currencies such as Bitcoin and, of course, the now hot Metaverse. She told reporters that some bigwigs around her have begun to turn to the blockchain and the metaverse, but in her opinion, Bitcoin and the metaverse have no direct connection.

 

　　"In the past, when the stock market and other financial markets were not good, we all thought that Bitcoin was a safe haven, but now I found out that Bitcoin is also a risk asset, not a safe-haven asset at all." Xiao K said, "I try to After buying the bottom, the fact is that it has fallen again and again.”

 

　　Why is Bitcoin selling off?

 

　　In the eyes of industry insiders, the surge in the U.S. dollar index has brought not only shocks in the global financial market, but also bloody storms in the virtual currency market. In fact, there are not a few virtual currencies that have fallen by more than 80% this year. At present, the total market value of global digital currencies has fallen below $1 trillion.

 

　　The trajectory of the Fed’s rate hikes has been an important factor in determining Bitcoin’s price action in 2022. Virtual currency prices have fallen this year as the Federal Reserve has steadily raised interest rates. Riskier assets have seen wild swings amid uncertainty over the path and magnitude of Fed rate hikes. Cici Lu, CEO of consulting firm Venn Link Partners, said: "Funds are flowing out of risky assets. After the Fed chairman's remarks, virtual currencies have adjusted sharply with U.S. stocks." The close correlation between the two shows that the Fed's attitude has permeated the virtual currency market, which is the reason for the recent sell-off in Bitcoin.

 

　　The currency exchange has exploded in succession

 

　　At the same time, a number of encrypted asset platforms exploded one after another.

 

　　According to overseas media reports, Poolin, one of the world's largest bitcoin mining pools, recently issued a statement saying that due to liquidity problems, withdrawals, lightning transactions and internal transfers have been suspended.

 

　　On August 11, the encrypted trading platform Hotbit issued a statement saying that it will suspend deposit, withdrawal and trading functions, and the specific recovery time cannot be determined at present. "Hotbit will resume normal services as soon as the assets are unfrozen. All users' assets and data on Hotbit are safe and correct."

 

　　On July 26, Bloomberg reported that Coinbase, the largest cryptocurrency exchange in the United States, is facing an investigation by the U.S. Securities and Exchange Commission (SEC), according to three people familiar with the matter. The investigation is into whether the latter improperly allowed Americans to trade digital assets that should have been registered as securities. SEC scrutiny of the platform has increased since Coinbase expanded the number of tokens it offers to trade, people familiar with the matter said.

 

　　On July 24, the currency exchange Hofu (hoo.com) released the announcement on the official website of the "Hoo Fu Debt-to-Token Conversion Plan, Partner Investment and Other Business Optimization Plans". The announcement stated that Hoo will stop all trading services from August 1, cancel all business status, transfer user assets to wallet accounts, launch debt-to-currency conversion plans and partner investment plans, and optimize financial derivatives contract transactions. .

 

　　On July 20, the Southeast Asian cryptocurrency exchange Zipmex officially tweeted that it would suspend user withdrawals until further notice in the future, explaining that this was due to various environmental impacts beyond the company’s control, including market volatility, and the resulting Cause some important business partners of the company to get into financial difficulties.

 

　　On July 13, Celsius Network, one of the world’s largest crypto lending platforms, announced that it had filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. Celsius said that the reason for taking the initiative to initiate bankruptcy proceedings is to “provide the company with opportunities to stabilize its business and successfully complete the bankruptcy and reorganization transactions to maximize value for all stakeholders.” Celsius estimated at the time that it had only 167 million in cash on hand. US dollars, while its own debt is 1 billion to 10 billion US dollars, involving more than 100,000 creditors.

 

　　Previously, Celsius had announced on June 13 that it had suspended all withdrawal, trading and transfer services due to “extreme market conditions”. It also stated that it is in the best interests of the community and customers to suspend services such as withdrawals and transactions. At that time, many investors doubted Celsius' operation, but the platform insisted that the goal is still to stabilize the liquidity and operation of the community, but the process will take time.

 

　　Earlier, on July 1, the cryptocurrency hedge fund Three Arrows Capital (3AC) filed for bankruptcy protection in the Bankruptcy Court for the Southern District of New York in the United States, announcing that it entered bankruptcy proceedings. The bankruptcy of Three Arrows Capital caused a huge chain reaction. Because Three Arrows Capital failed to repay about $650 million in cryptocurrency loans, on July 6, one of Three Arrows Capital’s main creditors, a cryptocurrency broker, and a Canadian listed company Voyager Digital files for bankruptcy.

 

　　The "big guy in the currency circle" happened one after another

 

　　Previously, the scene of the collapse of the third-largest stablecoin UST in the currency circle and its sister token, Luna coin, impressed many people. This incident triggered panic in the global currency circle and exacerbated the sharp drop in the price of Bitcoin. It is considered to be a "Lehman moment" that may trigger the collapse of the currency circle.

 

　　Today, the founders of UST and Luna could face jail time. The latest news pointed out that South Korean prosecutors asked Interpol to issue a red notice to Kwon Do-hyung, co-founder of the collapsed virtual currency operator Terraform Labs, saying that the latter refused to cooperate with South Korea’s investigation into the $40 billion implosion of the above-mentioned tokens. The South Korean District Attorney's Office in Seoul said it had asked the South Korean foreign ministry to revoke Kwon Dohyung's South Korean passport. "He is apparently at large and has no intention of appearing in court."

 

　　The Luna coin was once called "Maotai in the currency circle" by players in the currency circle. On May 12, the Luna coin fell from a high level to US$0.01, a drop of more than 99% compared with a week ago. Since then, the price of Luna coin has fallen all the way, and the lowest price has dropped to 0.0000165 US dollars, which is close to 0. In April this year, the value of 1 Luna coin reached a maximum of 119.7 US dollars, which has shrunk by more than 7 million times in more than a month. Kwon Doheng, the main developer of the cryptocurrency Luna, has been accused of fraud by investors.

 

　　Indeed, the sharp drop in virtual currency prices has caused many exchanges to shut down and run away. The high risks of virtual currency business have been revealed, and some virtual currency-related fraud cases have also surfaced. According to a report by the Virtual Currency Analysis Agency, cryptocurrency-related scams will be worth as much as $7.7 billion in 2021.

 

　　On the other hand, various countries continue to strengthen the supervision of the virtual currency market. U.S. regulators are also preparing for tighter regulation of the digital currency market. Previously, Federal Reserve Vice Chairman Lael Brainard warned that the turmoil in the virtual currency market has not yet posed a "systemic risk" to the entire financial system, but the government needs to fill the regulatory gap to protect consumers and investors and ensure market stability. Meanwhile, Fed officials are closely watching the volatility in virtual assets.

Recently, a U.S. federal court released a verdict in a cryptocurrency fraud case. Cryptocurrency firm BitConnect executive Glenn Arcaro has been sentenced to 38 months in prison and fined a total of $80 million by a U.S. federal court for his involvement in a large-scale fraudulent cryptocurrency investment scheme.

 

　　Local prosecutors called it "the largest ever criminally charged cryptocurrency fraud" and a "textbook-level Ponzi scheme." It is reported that victims of this scam are all over the world. According to the U.S. federal court, 4,154 victims from 95 countries were involved in this scam, involving more than $2 billion in funds.

 

　　On August 20, Faruk Fatih Ozer, founder of the Turkish cryptocurrency exchange Thodex, was arrested in Albania. Turkey said his identity had been confirmed by biometric results and extradition proceedings had started. Faruk Fatih Ozer has been charged by Turkey's justice ministry with being involved in Turkey's largest-ever fraud, and according to Bloomberg, he could be jailed for 40,600 years if found guilty on all counts.

 

　　In April 2021, Thodex abruptly stopped its services and declared bankruptcy, and its founder, Faruk Fatih Ozer, fled Turkey with $2 billion (nearly 14 billion yuan) worth of cryptocurrency. A report by cryptocurrency data firm Chainalysis estimated that the exchange caused losses to investors at about $2.52 billion, accounting for 90% of the total losses from global cryptocurrency exchanges in 2021.