Abstract: The macroeconomic cycle is down, the funds are panic, high-risk assets are first sold, and digital currency is a very typical high-risk asset. The global digital currency market has evaporated its market value of $36.2 billion within 24 hours, and the top 20 currencies in the market capitalization have fallen across the board.
Caijing reporter Luo Ruixing / Wen Zhang Wei / editor
At $36.2 billion, the global digital currency market has evaporated its huge market value within 24 hours since 5 pm GMT on September 5. According to CoinMarketCap data, the current global cryptocurrency total market value is about 202.06 billion US dollars, a drop of about 15% in one day.
“One night, the mountains and the mountains are full of autumn winds.” A person in the industry who has long been concerned about the digital currency market sighed in the circle of friends.
"Financial" reporters observed that the current top 20 digital currency currencies in the total market value of the market fell by about 15%. In the top 100 currencies of the total market capitalization, only a few currencies such as Bitcoin Diamond (BCD) are on the rise. As of press time, Bitcoin fell by 12.05% and Ethereum fell by 19.86%.
Cao Yu, the chief blockchain expert of Cinda Securities, told the Caijing reporter that due to the fact that the technology has not yet reached a large scale and involves many interests, the confidence of the entire blockchain is very weak. “The macroeconomic cycle is down, the funds are panic, the first is selling high-risk assets, and the digital currency is a very typical high-risk asset,” Cao Yu said.
The total market value of cryptocurrency fluctuates, source: cryptocurrency quote site Coinmarketcap
Suspect cloud behind the plunge
"The market is clearing up. In 2017, this market has come in too many institutions and people, pulling, shouting, and making markets, making the market smouldering," Cao Yu said.
Under the bear market, the digital currency market is more sensitive, and small negatives will cause market shocks.
In the US market, the Bitcoin Exchange Index Fund (ETF) applications that the founders of the Gemini Exchange, the Winklevoss twin brothers, raised from March last year to July this year, were rejected by the US Securities and Exchange Commission (SEC). Market confidence was further weakened. Due to this news, Bitcoin fell nearly 25% from more than 8,000 US dollars in mid-August this year.
At the news level, according to foreign media Businessinsider reported on September 5, as the cryptocurrency regulatory environment is still unclear, Goldman Sachs has temporarily set aside plans to open a cryptocurrency trading counter and is focusing on developing a cryptocurrency management product. Better serve large institutional clients. Earlier, Bloomberg reported that Goldman Sachs plans to set up a trading desk to conduct market-making transactions on cryptocurrency before June this year.
Goldman Sachs temporarily suspends the plan to open a cryptocurrency trading counter, which was interpreted by some media as “abandoning” the Bitcoin trading counter, which became a big doubt that caused bitcoin price to fall.
The possible impact of Goldman’s move is that the market is inconsistent. Independent analyst Joseph Young said on his Twitter yesterday that "this interpretation is stupid." He believes that Goldman Sachs will focus on the cryptocurrency business in the short term, and cryptocurrency will bring more funds to the cryptocurrency sector than the launch of the trading desk.
Some market participants believe that Goldman Sachs' development of cryptocurrency custody business will be extremely beneficial. "As far as I know, many family funds and hedge funds in the United States are waiting to come in, but they lack channels. Once the security system is established, there will be a lot of big money to enter this market." Blockchain investment institutions based in Silicon Valley, USA Yu Weibo, the founder of Eight-dimensional Capital, told the Caijing reporter.
On the other hand, industry insiders pointed out that the real reason for the bitcoin plunge or the digital currency exchange ShapeShift will cancel the anonymous transaction and adopt the registration system, which is undoubtedly to combat money laundering and other illegal activities. As a result, other currencies in the cryptocurrency market have fallen more than Bitcoin today, showing that many anonymous and small-currency holders are selling.
At home, regulation is also escalating. On August 24, the five ministries and commissions, such as the China Insurance Regulatory Commission, jointly issued a risk warning to warn some lawless elements to use the banner of “financial innovation” and “blockchain” to illegally raise funds, pyramid schemes, fraud, or manipulate currency prices and use abroad. The server conducts activities such as activities to domestic residents.
Short-term or long-term bearish?
Mike McGlone, senior commodities strategist at Bloomberg, previously said that he is currently in a bearish market and that holders need to sell in the bear market as usual. He pointed out that the chart shows that the price of bitcoin is declining, but the bears are rising.
Just two days ago, the number of bitcoin shorts rose sharply on the Bitfinex platform. On September 2, bitcoin shorts rose from 22050 to 33276 in 4 hours. McGlone believes that the revenue provided by the market will be declining. In the future, Bitcoin holders should sell at $8,500. He added that the price of bitcoin may start to fall, and may actually fall to $5,000, after which people have to throw the bitcoin they hold.
BCtrend analyst Jeffrey believes that the market traffic is generally shrinking, the operating costs of the whole network are high, the miners' reshuffle continues, and the adjustment demand is increasing. In terms of technical analysis, independent analyst Tommy Albert believes that Bitcoin has dropped by about $1,000 in 24 hours. The main circulation certificate has hit a new low in the year. The short-term is seriously oversold and there is a certain rebound demand, but the overall trend has been destroyed. under.
At the same time, the market level also conveyed confidence in the underlying technology blockchain of digital currencies. Yu Yubo told the Caijing reporter that according to his understanding, most of the funds in the United States still hold long-term attitudes towards Bitcoin. "Because they believe that the blockchain is the next generation of value Internet technology, they are not too concerned about short-term fluctuations. ," Yu Yubo said.
PwC's recently released "2018 Global Blockchain Survey" shows that strict regulation is still the main tone of industry development in the future. The report said that the application prospects of blockchain technology are still unclear.
The survey shows that for the application of blockchain in the financial sector, compliance risks and application effects are the most concerned issues for respondents. In view of the small number of cases in the application of blockchain technology in the domestic financial industry, most of the companies surveyed are cautious about blockchain technology.