Since Friday's U.S. CPI data for May beat expectations, investors around the world have sold risky assets on fears inflation will last longer. The worst performer is the cryptocurrency market. Bitcoin fell below the $21,000 mark on Monday, hitting a low of $20,950, its lowest level since December 2020. The latest price was $21,598, marking the eighth consecutive day of bitcoin's decline and a 30% drop this month. Ethereum hit a low of $1,164, its lowest level since January 2021.
Seven billionaires lost $114 billion
Bitcoin is now down 69% from its all-time peak of $68,991.85 in November. If you bought a bitcoin at its peak, you'd have lost as much as 320,000 renminbi so far, about the price of a Tesla Model 3.
It is worth mentioning that in this round of decline, including Musk, a number of investment bigwigs have lost a lot. That includes Tesla CEO Elon Musk.
Tesla's bitcoin holdings had a fair market value of $1.99 billion as of Dec. 31, 2021, according to tesla's annual report filing. Musk has publicly stated that he owns some Bitcoin, Dogecoin, and Ether, and that he will hold on to bitcoin for the long term and wants to see it succeed.
Musk and Tesla are thought to hold 42,069 bitcoins. Musk replied: "Not that many bitcoins, but close enough."
Musk not only actively owns bitcoin, but also promotes its circulation and use.
In March of last year, Tesla's U.S. website showed that users could choose to pay for a car with Bitcoin. Bitcoin purchases of Tesla were also terminated last May due to concerns about the impact of cryptocurrencies on the environment.
According to the Bloomberg Billionaires Index, seven cryptocurrency-related billionaires have lost a combined $114 billion since Bitcoin hit a record high of nearly $69,000 on November 9 last year, and since the bitcoin and cryptocurrency markets have fallen to their lowest level in nearly two years.
Virtual currency may enter long-term decline channel
The falling virtual currency has hurt the hearts of many investors. According to data from bitcoin fans, more than 88,000 people traded bitcoin in the past 24 hours, with a total amount of $279 million (about 1.874 billion yuan), as of 15:00 on June 15, Beijing time.
Where will Bitcoin go in the future? Pan Helin, a researcher and co-director of the Digital Economy and Financial Innovation Research Center at the International United Business School of Zhejiang University, said that it is certain that in the process of the Federal Reserve's interest rate hike, bitcoin and other cryptocurrencies are bound to fall, as is the decline in trading volume liquidity.
Plate and think Lin, COINS and etheric fang losses due to these virtual currency itself belongs to the risk assets, and in the context of the federal reserve to raise interest rates, the dollar for risky assets depreciation pressure, so the current virtual currency in the middle of a trend, of course, the virtual currency is ultimately zero also is bad, it depends on the strong dollar extrusion condition, the value of virtual currency, In the process of the Fed raising interest rates, the decline of cryptocurrency is inevitable, and the decline of volume liquidity is inevitable.
"In fact, the virtual currency is banned in China, and China's tokens cannot be circulated in the secondary market. Even if it is a digital collection, it is mainly focused on the pilot trial of the primary market, so these currency circle behaviors themselves are violations." Of course, due to the decentralized nature of virtual currency, there is no good way to supervise cross-border private virtual currency transactions, Pan explained. And virtual currency exchange, itself is illegal in China, not only that, more than the current virtual currency exchange behavior, is a set of code itself, the threshold is low, the virtual currency ex-change harvesting virtual currency, virtual currency issuer and retail harvest, a ring by ring, for this kind of false virtual currency exchange, its risk not only is the risk of depreciation, Most likely the virtual coins being traded are non-existent codes. "A lot of virtual currencies, which are actually privately issued, are just a shell of virtual currencies, issued at a very low cost and are purely money-spinning tools. Investors should avoid being leeks."