Bitcoin gets a great start to the new year! The minimum fell to $40,000, and practitioners shouted: the bear market is coming

At the beginning of 2022, the virtual currency market fell into a trough. On January 10, 2022, a reporter from Beijing Business Daily found that since the end of December 2021, the two major currencies, Bitcoin and Ethereum, have been falling continuously, with Bitcoin falling to a minimum of US$40,000, and Ethereum reaching a minimum of US$3,000. , In addition, some exchange platform coins, altcoins, etc. fell to record lows.

As of 17:34 on January 10, the trading price of Bitcoin was $41,900, a decrease of $10,000 from the end of December 2021, and the price of Ethereum was $3,150, a 24% drop from the price at the end of December 2021...

falling and falling

"The bear market is coming!" One currency circle practitioners told the Beijing Business Daily reporter that compared with the beginning of the year in 2021, the currency circle suffered a blowout in the New Year in 2022.

Taking Bitcoin as an example, at the end of December 2021, the price reached a maximum of US$52,000, but after several rounds of declines, it fell to a new low within three months on January 9, 2022, at US$40,700, a price drop of 21.7%; Another mainstream currency, Ethereum, has not been spared. At present, the latest price of Ethereum is 3,150 US dollars, which is a 24% drop from the price of 4,121 US dollars at the end of December.

In addition to Bitcoin and Ethereum, other virtual currencies such as BNB, SOL, XRP, and DOGE also fell sharply, and some platform coins and altcoins even fell to record lows.

The collective collapse of virtual currencies has also caused a large number of investors in the currency circle to liquidate their positions. According to the data of the contract emperor, in the past 24 hours, more than 21,000 people in the whole network liquidated their positions, and the liquidation funds reached 40.72 million US dollars (about 259 million yuan). ).

"The price correction in the currency circle is inevitable, because the virtual currency business itself is illegal, such as promoting global money laundering and crime through encryption, and the currency value fluctuates greatly, which is not suitable for use as a world currency, and is not conducive to circulation and savings." Ministry of Industry and Information Technology, Information and Communication Economy Pan Helin, member of the Expert Committee and Executive Dean of the Digital Economy Research Institute of Zhongnan University of Economics and Law, analyzed to a reporter from Beijing Business Daily.

However, in response to the second round of slump, Pan Helin pointed out that the trigger point of this round of virtual currency slump was actually the civil unrest in Kazakhstan. Data shows that in 2021, Kazakhstan will be the second largest Bitcoin mining center in the world after the United States. The computing power accounts for 18% of the world. Due to the network disconnection in Kazakhstan, the computing power was forced to withdraw.

"This also shows that the current virtual currency also belongs to the circle mode. When the computing power decreases, the number of participants decreases, and the number of players decreases accordingly, which leads to the weakening of Bitcoin price support." Pan Helin said.

Li Ya, a lawyer from Beijing Zhongwen Law Firm, also pointed out that the new round of price decline in the currency circle is driven by various reasons. There are technical reasons, and the price correction in January after the year is the norm; there are also political reasons, because some countries’ political situation turbulence; there is also the problem of computing power, which is bad for the market due to the general decline in computing power.

Chaos does not stop

After several consecutive days of plummeting, many currency residents began to panic, especially some novice "Xiaobai" who just entered the currency circle. They have no experience and lack of identification ability. If you are not careful, you will be deeply trapped, and you will regret it.

Such "little whites" are not uncommon. Li Feng (pseudonym) is a novice who entered the currency circle at the end of 2021. He complained bitterly, "I mainly listened to my friend's introduction. He made a lot of money by investing in coins. He recommended a coin to me, saying that it will be soon. Pulling the plate, I invested 10,000 yuan with the mentality of giving it a try. Who knew that I lost 30% not long after I bought it, and now there is less than 7,000 yuan left, which is really a risk. "

More regretful than Li Feng, there is also Xiaolin (pseudonym), who usually does not contact the currency circle. She didn't even know what kind of currency she bought, and she didn't participate in it herself, so she transferred 100,000 yuan to a friend, "At that time My friend just said that it was a very popular new chain game project, and I didn’t know how to operate it, but I trusted him, so I transferred the money directly to him, because I can’t read the market, and I don’t know why it fell like this. Well, it's stuck anyway..."

It can be seen that there are still funds and air coins in the market, which are often developed offline and attract investors through financial pyramid schemes and other means, especially some so-called "chain games" (blockchain games), "NFT" ( Confused by the gimmicks of non-fungible tokens), newbies are easily confused by the high ROI.

In fact, the "chain game" project has been popular in the currency circle for a long time. It mainly obtains production tools through krypton gold (payment of fees, especially the recharge behavior in online games), and obtains NFT blessings in the game, which is non-replicable. Unique game items and trade them.

An industry insider told reporters that at present, most chain games rely on NFT and Bitcoin price waves to make profits. Although the NFT digital assets in the game are unique, they do not have artistic and humanistic value. In fact, it is a random computer. The price of the generated virtual items also depends on the number of receivers.

"Except for the top chain games, 90% of other chain games do not actually have the basis for realizing the flow of digital assets, and the initial investment is entirely to send money to the game platform; in addition, for NFTs without artistic and humanistic value, the essence can also be said to be Drumming to pass flowers, when no one accepts it, it becomes a game of cutting leeks on the game platform." Pan Helin said bluntly.

Just on January 10, the Chongqing Local Financial Supervision and Administration Bureau issued a risk warning to “blockchain” and “virtual currency” investment risks. As the development of blockchain technology has received extensive attention, some criminals took the opportunity to hype the concept of blockchain, using the so-called "virtual currency", "blockchain mall", "blockchain game", "investment in IPFS distributed storage server project", etc. Illegal absorption of public funds in name, infringing public rights and interests.

In addition to "chain tours", there are still many so-called high-yield investment projects in the currency circle that are wearing the cloak of blockchain and rubbing against the hot spots of "coin" and "chain", which actually have nothing to do with blockchain technology.

The Chongqing Local Financial Supervision and Administration Bureau disclosed that its main characteristics and risks are as follows: First, network and cross-border transactions are obvious, online transactions, risks spread widely, spread quickly, a large number of illegal funds flow overseas, and supervision and tracking are difficult. . Second, it is deceptive, seductive, and concealed. Criminals use hot concepts to hype, fabricate various fake projects, use high returns as bait, and manipulate virtual currency price trends behind the scenes. The third is that there are various illegal risks. The criminals hold offline activities or publicize in various forums and WeChat groups, and lure investors to develop personnel to join, which has the characteristics of illegal fundraising, fraud, pyramid selling and other illegal behaviors.

Governance Plus

In response to the chaos in the currency circle, the regulator has repeatedly stated that it will crack down on the encirclement and suppression, but the market chaos emerges one after another, and the industry predicts that it will be further tracked and improved in the future.

Li Ya pointed out that funds, air coins, etc. involve illegal and criminal activities, and the supervision and public security departments should increase supervision and law enforcement in this area in the future. In addition, from the perspective of investment, the transaction of virtual currency in China has been identified as an illegal financial behavior, and the relevant transaction behavior is not protected by Chinese laws. Investors should choose a licensed financial institution for investment in light of their own circumstances. .

"Supervision has been repeated three times. Before the virtual currency thunderstorm, we spared no effort to inform ordinary people of the risks. We also took practical actions to eliminate mining machines and cut off the connection between virtual currency and financial institutions. It can be said that supervision has handled this aspect very well. However, since virtual currency is decentralized, peer-to-peer and person-to-person transactions are difficult to monitor at the regulatory level, so this part of investors’ participation in virtual currency is currently a state of buyer’s conceit.” Pan Helin say.

At present, there are still some virtual currency players who continue to invest in virtual currency through private transactions. C2C virtual currency transactions and cross-border virtual currency transactions still have a long way to go. Pan and Lin predict that the follow-up focus of supervision is still to isolate virtual currency and financial institutions to prevent the risk of virtual currency price fluctuations from being transmitted to financial institutions. In addition, consumers must be aware of the risks in the currency circle and stay away from virtual currencies.