Bitcoin plunged 80% years “coin circle and bubble?

Source: Economic Daily – Chinese Economic Net

The coin circle of “civil war” objectively shaken people’s confidence in the market, regulatory uncertainty for the virtual currency to cast a shadow. At present there are many problems such as currency manipulation, fraud ring, bitcoin prices have deviated from its value, there is a huge bubble, it is easy to appear once wind sways grass spike —

In 11 months, bitcoin fell below a series of important points, hit a low of $3500. Since December, the continuation of the recent bitcoin prices continued to decline, hovering below $4000, fell to about $3100. At the end of last year, bitcoin was standing near the peak of $20 thousand, less than a year, fell more than 80%.

In the face of today’s market, people either sell the machine completely “retreat ring”, mining machine industry has also been winter night; eager for a fight, try to “hunters”; but more people are keeping doubts: how big bitcoin bubble? It will continue to fall?

“Coin circle” continued to Mengyin

Since November, bitcoin prices continued to fall, one after another through a number of integer points. 15 days 11 months fell below $6000, 19, 11 months fell below $5000, 11 month 25 days is dropped to $3500 rare. This is since last September 27th, bitcoin fell under the $4000 mark for the first time. As of December 19th, bitcoin is still in the low of $4000. Compared to a peak of $19 thousand and 700 in December last year, has dropped to 80%.

Other virtual currency is also showing a trend of miserable and gloomy atmosphere. Virtual currency, including Ethernet Fang, reboxetine currency and Wright currency in November, appeared in more than 10% of the decline. The total market value of virtual currency is also considerably “diving”, as of December 19th, the total market value of the virtual currency is less than $130 billion, and this number at the beginning of this year reached $850 billion, a decline of 85%.

For the collapse of bitcoin and other virtual currency market, that is the result of many factors together, including the “finger pointing to the bitcoin cash (BCH) hard bifurcation. The hard landing fork in the early hours of November 16th, to participate in BCH hard bifurcation between Australia, Nakamoto, CEO and bit Jihan Wu are in a large-scale “war”, namely the influence other currency stability and trading. The coin ring civil war some people objectively shaken confidence in the market, causing some users panic and voting with their feet, causing the market fluctuation.

Regulatory uncertainty for virtual currency overshadowed. After China’s last full stop bitcoin transactions and token offering financing (ICO), many countries in the world are aware of the risks hidden in bitcoin and other virtual currencies, have joined the ranks of follow strict supervision. Such as the recent U.S. Securities and Exchange Commission to punish the two virtual currency project, the FSA has 6 penalties for virtual currency exchange and to improve business.

Some experts believe that virtual currency price fluctuation, is mainly determined by its properties. At present there are many problems such as currency manipulation, fraud ring, bitcoin prices have deviated from its value, there is a huge bubble, once the wind sways grass prone to spike. At the same time, the total volume of virtual currency is relatively small, if investors focus on abandoned, it is easy to make the market price fluctuations caused by the collapse of confidence.

In case of cold mill industry

A substantial decline in the price of bitcoin virtual currency and the market value of a shrinking market also let its winter night.

Its essence is a computing device, its input is mine by force, the right to obtain packaged virtual currency block, at the completion of packing after get virtual currency system generated as a reward. This process is known as “mining”.

To some extent, the mining machine is considered competition force. Earlier bitcoin hot spawned the rapid expansion of its market. In the 2017 fire bitcoin, bitcoin prices from less than $1000 soared to nearly $20 thousand by the end of the peak, its price is rising, was as high as twenty thousand or thirty thousand yuan, is often hard to find a situation.

At the time of the “miners” to go all the way around the world looking for vehicle, and like migratory birds will migrate in cheaper local mills. The survival path is the “circle of coins was popular for Inner Mongolia in the winter, summer to Sichuan, in the country under the supervision of high pressure, and even Kampuchea, Philippines and other places to mine.

Changes appeared in November of this year, with bitcoin prices sharply diving, some of the price up to twenty thousand or thirty thousand yuan a mill, suddenly fell to 1000 yuan. The second-hand vehicle “sold on the pounds of news on the Internet can be heard without end.

A senior “miners” told reporters that now bitcoin prices are low, mining yield has been basically can not cover the power needed for mining and plant leasing and other costs, the boot means to lose money. Therefore, Xinjiang, Inner Mongolia and other regions of the many small bitcoin mine has been in the “off”, some simply choose to sell its liquidation.

At the same time, the increasingly heavy machine replacement costs are squeezing profit space mining. The “miners” said, in recent years its iterative update acceleration, the greater its force is emerging, is small old mill soon eliminated. Its increasingly intense competition between the rising cost of $mills, stack price fell, some bitcoin mining can only choose to sell the old machine “retreat ring”.

In this case, whether the price of second-hand machine or new machine sales are affected. In addition, mills also relates to a large hardware market, from hot to cold mill will also spread some of the external market, such as the current graphics cards, chips and other electronic components have also been showing price decline, the future trend remains to be seen.

Or will continue to decline

Bitcoin bubble, seems to be a need to discuss the issue. Earlier, social media picture was widely forwarded, the figure shows the price bubble curve curve and classic bitcoin strikingly consistent.

“Bitcoin exists and the fundamental limitations of history as the value of private monetary instability, credibility is not strong, can accept a limited range, prone to large negative externality.” The original Academy of Social Sciences Institute of finance, financial development director Yi Xianrong said, on the surface of the designer is to give the network transaction provides a similar cash transaction system, in fact has become a minority across social wealth tools, the price suddenly rise, blowing up one of the largest virtual currency in the history of the bubble.

After a number of countries including the United States approved bitcoin trading futures, but not to be seriously supervision. The bitcoin covered with a seemingly legitimate coat, but also makes bitcoin is more like the seventeenth Century Holland tulip bubble”.

Walk in the gray area of the day may soon end point to the current awareness, more and more countries and regions to allow the development of the virtual currency adverse effects on financial stability. The UK financial conduct authority are discussing a ban on virtual currency derivatives. Hongkong Securities Regulatory Commission that is to study the supervision of encryption currency exchange plan. India’s central bank as early as April this year to ban banks and other institutions to provide digital currency trading services.

Experts believe that, compared with previous highs of nearly $20 thousand, current price decline seems bitcoin has been deep, but if the future governments to strengthen supervision, or its own technological differences deepen, bitcoin bubble level will go deeper.

From the past bitcoin trend, higher than the decline has not happened. From 2013 to 2015, bitcoin fell from a high of $1242 to a low of $198, down 84%. Now in the tide receded, whether the bottom is difficult to determine, the future should be vigilant.

According to the insiders, bitcoin fell, for the block chain industry is not necessarily a good thing. After some criminals under the banner of “financial innovation” and “blockchain” banner, through the issuance of the so-called “virtual currency” “virtual assets” and “digital assets” and other ways to absorb funds, borrow “blockchain” concept for illegal fund-raising, pyramid, fraud. The collapse of the virtual currency, just provide opportunities for market clearing. After the bubble, may mean that the real “industry chain block” era is coming, with the market regulation is more perfect, the future will have a real block chain technology widely application space. Economic Daily? Li Hualin China economic network reporter

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