Bitcoin is cut, small currency is gone, will the digital currency craze come to an end?


Author / Wu tinggang
How happy it is when it goes up, how pathetic it is when it goes down. Digital currency is facing the biggest slump since March 2020, which is comparable to the 3.12 slump in 2020.
Bitcoin fell as low as $29000, down more than 30% in a single day. At the peak of traffic, the mainstream exchanges, such as currency security and currency, have difficulties in login and become stuck. Coin an suspended the withdrawal of Ethereum and erc20 tokens and some leveraged transactions.
The direct reason for the slump is that Chinese officials have once again reiterated their strict regulatory attitude towards digital currencies. On May 18, the China Mutual Fund Association, the banking association and the payment and clearing Association jointly issued an announcement on preventing the risk of speculation in virtual currency transactions, stressing that financial institutions, Payment institutions and other member units should not carry out business related to virtual currency.
Third, the association has used very strict wording for bitcoin, requiring that it should not use virtual currency to price products and services, not underwrite insurance business related to virtual currency or include virtual currency into insurance liability, and not directly or indirectly provide customers with other services related to virtual currency, including but not limited to: providing customers with virtual currency registration, transactions, services related to virtual currency Clearing, settlement and other services; Accepting virtual currency or using virtual currency as payment and settlement tool; Exchange services between virtual currency and RMB and foreign currency; Carry out the storage, trusteeship and mortgage of virtual currency; Issuing financial products related to virtual currency; Take virtual currency as the investment target of trust and fund.
The document is equivalent to cutting off the channel between legal currency and digital currency, becoming the last straw to crush the surge of digital currency. After the news, bitcoin fell more than $3000 again, falling below the psychological price of $40000.
On the night of May 20, the panic reached its peak, with bitcoin as low as $29000. In the past 24 hours, 500000 people have burst their positions by 40 billion yuan.
Bitcoin cut to pieces
BNB, the platform currency of coin an, the largest digital currency exchange, fell by more than 40%, while Ethereum fell by more than 30%.
Other small currencies are falling more crazily. The dog coin, which was ordered by musk, once created a myth of 100 times increase, but recently there has been a deep correction. From $0.74 on May 8 to $0.30 last night, down more than 60% in about 10 days.
Before that, Shib, the popular fried chicken and Chai dog coin, had fallen to almost nothing. Similar to Chaigou coin, there are also a bunch of small currencies, with a decline of more than 90%, in the state of no one taking over.
Digital currency is facing a series of attacks, and regulation is only an incentive
In this round of digital currency, the price of almost all currencies has been cut. As they are all triggered by China’s regulatory policies, this is regarded as another 94 event in the currency circle (on September 4, 2017, seven departments, including the central bank, the Internet Information Office, the Ministry of industry and information technology, the State Administration for Industry and commerce, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission, officially called for the suspension of ICO financing. The policy has led to a sharp decline in digital currency in the short term.
Analyst lark Davis pointed out that the recent decline caused bitcoin’s 14 day relative strength index to enter the oversold area for the first time since March 2020, indicating that the slump may be approaching the platform period.
The most direct cause of the market crash is the joint announcement issued by China Mutual Fund Association, Banking Association and payment and clearing Association. According to the announcement, the speculation of virtual currency transactions rebounded, seriously harming the safety of people’s property and disrupting the normal economic and financial order.
According to the announcement, virtual currency is a specific virtual commodity, which is not issued by the monetary authority and has no monetary attributes such as legal compensation and compulsion. It is not a real currency and should not and cannot be used as currency in the market.
The announcement also banned many services for virtual currency. It violates relevant laws and regulations, and is suspected of illegal fund-raising, illegal issuance of securities, illegal exchange of legal tender and virtual currency, exchange between legal tender and virtual currency, trading virtual currency as a central counter party, providing information intermediary and pricing services for virtual currency transactions, token issuance and financing, and virtual currency derivatives transactions Illegal sale of token tickets and other criminal activities.
As one of the largest participants in digital currency, China has a large number of digital currency investors. Cutting off the connection between legal currency and digital currency is tantamount to cutting off the capital source of digital currency speculation. Regulation is only an inducement. The deeper reason is that the digital currency has a huge rise in the early stage, and there is a demand for decline in itself.
Ouyi okex said that bitcoin has been in a weak situation recently for various reasons.
First, bitcoin’s biggest increase since March 2020 has exceeded 1600%. The market is bound to accumulate a large number of profit opportunities, and the institutions are even more profitable, resulting in increased pressure on the realization of profit opportunities;
Second, although the Federal Reserve has always insisted that it will continue to maintain the current ultra loose monetary policy, investors are worried that inflation may get out of control if it goes on like this, and there are endless criticisms on this, which has increased investors’ risk aversion;
Third, on May 18, the China Mutual Fund Association, the banking association and the payment and clearing Association jointly issued a document to prompt market risks, and the market sentiment also gave corresponding feedback.
Another obvious reason is that musk, the most famous leader in the field of digital currency, is becoming hesitant.
Musk’s backwater makes the coin circle hero a public enemy
In the recent downturn of digital currency as a whole, technology magnate musk has played an important role.
Musk once became the richest man in the world and has a wide appeal in the world. As the most staunch supporter of digital currency, his Tesla purchased $1.5 billion of bitcoin.
Musk has repeatedly sent several tweets indicating or suggesting his preference for dogcoin. On May 10, he said that “dogcoin will be used to pay for the dogcoin satellite that SpaceX will launch next year.”. As a result, Musk’s fans are crazy to buy, and the dog coin has increased by more than 100 times.
Recently, however, Musk’s view on digital currency is uncertain, which has greatly dampened market confidence.

In “Saturday night live” on May 8, after repeated questioning by the host, musk “admits” that dog money is a “Hustle”.
Shortly after that, musk announced that Tesla would suspend its acceptance of buying Tesla cars with bitcoin because it was worried that bitcoin mining would increase the consumption of fossil energy.
Moreover, in an interaction with netizens, musk suggested that Tesla had sold its bitcoin.
In the past few months, bitcoin, dogcoin, Shi and other digital currencies have increased significantly. In the face of huge floating surplus, any wind and grass will bring a large area of retreat.