The hype of virtual currency will eventually be in vain
"The currency circle has collapsed" is on the hot search again.
Recently, the virtual currency market has suffered a "big robbery".
The first is that the LUNA coin, known as the "Coin Circle Moutai", has plunged by more than 99%. Since May 11, it has fallen from above $30 to about $0.0003 on the evening of May 14, almost returning to zero.
Virtual currencies such as Bitcoin and Ethereum also plummeted one after another. On May 12, Bitcoin fell from about $32,000 to below $27,000.
The virtual currency, which has always been advocated by people in the currency circle as "digital gold" and "safe-haven asset", once again proved its high risk and "big bubble" with practical actions.
The plunge was largely related to the Fed raising interest rates.
The price of virtual currency is easily affected by liquidity. In a market environment with loose liquidity, speculation is prevalent, driving the value of the currency to rise. Once the market environment changes, the market often turns sharply down.
Since the beginning of this year, the Federal Reserve has launched an interest rate hike cycle, and global liquidity has tightened. Especially in early May, the Federal Reserve raised interest rates by 50 basis points at a time, which had a negative impact on capital and market sentiment, and virtual currencies were the first to bear the brunt.
The ups and downs are the consistent performance of virtual currencies.
Virtual currencies are not supported by actual value, and their prices are easily manipulated. Changes in the direction of regulation and the buying and selling of several investment giants can lead to violent fluctuations in currency values, triggering a large number of sell-offs.
With the efforts of my country's regulatory authorities to build a firewall, the transmission of virtual currency risks in the country has been effectively blocked.
Since last year, the central bank and other departments have introduced a series of measures to prohibit financial institutions from conducting and participating in virtual currency-related businesses, cleaning up and banning domestic virtual currency trading platforms, and increasing verification and rectification of "mining" efforts, all to extinguish the "virtual fire" of virtual currency speculation. ” and put “protection locks” on investors’ wallets.
The "bloodbath" of virtual currency this time has once again proved that the actions of my country's regulatory authorities are decisive, powerful, timely and necessary.
It should be emphasized that in my country, virtual currency transactions are not protected by law.
In September last year, 10 departments issued the "Notice on Further Preventing and Disposing of Hype Risks in Virtual Currency Transactions", clarifying that any legal person, unincorporated organization or natural person investing in virtual currency and related derivatives violates public order and good customs, and the relevant civil legal acts are invalid. The loss caused by this shall be borne by itself; if it is suspected of disrupting the financial order and endangering financial security, it shall be investigated and dealt with by the relevant departments in accordance with the law.
This means that investors rashly "enter the circle", not to mention their own losses, and are likely to touch the legal red line.
For an investment target, if there is speculation and speculation, and there is no practical and extensive application scenario, there is no development prospect.
At present, the slump is still continuing, and no one knows when this "runaway roller coaster" will reach the end.
Investors should remain rational, promptly eliminate the greed of bottom-hunting and get rich overnight, and stay away from related trading speculations, otherwise it is very likely that "currency will go to the fortune".
Li Hualin