Out of the mix, sooner or later to pay back!
Virtual currencies are deducing the immutable laws of capital.
Bitcoin flashed again, and 170,000 people exploded
Today (January 21st) at noon, bitcoin quotes fell below $38,900 for a short time, a 24-hour decline of more than 10%. Ethereum fell below $2870, a 24-hour drop of more than 12%.
Just on October 20, 2021, the bitcoin price broke through the all-time high of $64,843 on April 11, 2021, hitting $66,000.
In three months, Bitcoin has fallen 40% from its highest point.
In the past 24 hours, a total of 169,200 overseas users have blown up their positions, and the largest single blow-up order is as high as 14.63 million US dollars.
Not long ago, because of the "power outage" in Kazakhstan, Bitcoin has experienced a flash crash.
Armed unrest broke out in Kazakhstan in early January, a national emergency entered on January 5, and the Internet was disrupted for several hours, directly affecting some of the bitcoin mining pools located in Kazakhstan.
After the network outage, the scale of the global mining company's business in Kazakhstan suddenly fell sharply, and the final strength of multiple Bitcoin mining pools to mine and process transactions fell by 12%-16%.
The network outage, which triggered a plunge in Bitcoin at the time.
On January 6, the price of Bitcoin plunged more than $4,000 in one day. In the early morning of January 9, the price of the coin fell to $40,595, falling more than $7,000 a week. According to the data, as of 12:00 on January 9, a total of 120,000 people on the whole network exploded in 24 hours, with a burst of 310 million US dollars, about 2 billion yuan.
Half a month later, Bitcoin flashed again.
The price system of virtual currencies is already crumbling, and there is a possibility of collapsing again at any time.
Why Bitcoin flash crashed
Many people believe that the disconnection of the Internet in Kazakhstan is the direct cause of bitcoin's plunge in early January.
Kazakhstan is a big bitcoin miner. In 2021, Kazakhstan is the world's second largest bitcoin mining center after the United States, accounting for 18% of the world's hash rate.
It is understood that hash rate, also known as hash rate, is a unit of measurement of the processing power of the Bitcoin network. The scale of operations of many mining companies around the world in Kazakhstan has suddenly dropped sharply.
Hours after a few hours of internal network disruption in Kazakhstan, cryptocurrency consulting and research site The Block said on social media that Bitcoin's global hash rate had dropped by 12 percent.
Some people also believe that Bitcoin's plunge is due to the expectation of interest rate hikes in the United States.
The weakness in the price of virtual currencies is said to be related to U.S. monetary policy, and the Fed is considering raising interest rates earlier than previously expected. Goldman Sachs is even expecting four rate hikes this year, the first of which could be in March.
Experts believe that investors continue to be cautious about the risky asset class to protect their assets.
Half a month has passed since the impact of the power outage and the expectation of interest rate hikes, why did Bitcoin collapse again today?
This may be related to Russia's policy.
On January 20, the Central Bank of Russia proposed to ban the mining and circulation of cryptocurrencies within Russia.
Outside of Russia, the European Union also has plans to ban mining.
The EU's top financial regulator recently renewed its call for a ban on major models of Bitcoin mining across the EU. Eric, vice chairman of the European Securities and Markets Authority, said bitcoin mining has become a "national problem" in Sweden and warned that cryptocurrencies pose a risk to achieving climate change goals in the Paris Agreement.
European regulators should consider banning existing mining models and pushing the industry to shift to a lower-energy model to reduce the industry's significant electricity use.
How much electricity does mining cost?
The graphics card miner mainly mines through the graphics card, that is, to see the power of the graphics card can roughly calculate the power of the entire mining machine. For example, the RX570 graphics card has a power of about 160 watts, and if it is a 6-8 card mining machine, its total power is about 900-1500 watts.
Professional mining machine it uses chips for mining, its chip stacking power consumption is also quite huge, such as Shenma's M3, its power is about 2200 watts -2500 watts, Ant S9 power is about 1600 watts.
The electricity consumption of a mining machine in January is equivalent to the electricity consumption of ordinary households for nearly half a year. This is just the electricity consumption of one mining machine, and multiple mining machines are stacked on top of each other to build a mine, and the power consumption is even more amazing.
While the mining machine consumes electricity, it will also generate huge amounts of heat, which requires equipment to ventilate and dissipate heat, and these devices also need electricity.
As of May 2021, the annual electricity consumption of bitcoin mining in the world is about 149.37 terawatt hours (1 terawatt hour is 1 billion kWh), which has surpassed the electricity consumption of Malaysia, Ukraine, and Sweden, and is very close to Vietnam, which ranks 25th in terms of power consumption.
There is no doubt that mining is a huge black hole in power consumption.
Electricity prices in many European countries have skyrocketed in 2021.
Electricity prices in Sweden have skyrocketed since mid-December last year, with the average daily spot price of electricity in the area around the capital Stockholm breaking the all-time record of 3 KZK per kWh on December 13 and soaring all the way to more than 6 KZK per kWh, once again breaking the record.
Uk electricity prices soared 700% as early as last September, a 22-year high.
Electricity prices in European countries such as Germany, France and the Netherlands soared again in November. Among them, German electricity prices soared all the way to the second highest level on record.
In addition, the price of electricity in France was close to 300 euros /MWh, and the price of electricity in Switzerland also set a record since 2007.
Of course, whether it is a disconnection, or a rate hike, or a power consumption, it is only the fuse of Bitcoin's decline.
The real reason for Bitcoin's plunge is that the bubble burst without any value support.
Last October, the highest price of Bitcoin reached $66,000 a piece, which has doubled 50 million times from the original price.
In the face of this increase, any language seems pale and powerless.
A virtual currency, invisible, untouchable, just by some concepts and so-called cutting-edge technology, it is hyped up, completely detached from its own value.
The same is true of the current metaverse, which is just a vague concept, and the main funds have begun to harvest.
One thought of heaven, one thought of hell.
When the capital soars, the funds are wildly pursued, and once the wind direction changes dramatically, the game of drumming and passing flowers will choose the last stick, and only a chicken feather will be left in the end.
Just like the Tulip Bubble in the Netherlands.
What is the bitcoin market like?
There is also a firm optimism that despite Bitcoin's nearly 40% drop from last year's high, Microstrategy founder Hodler Xaar has not given up on his multibillion bet on Bitcoin. He said in an interview that even if bitcoin will continue to go lower, he remains optimistic about the future of bitcoin: "We are not going to sell bitcoin, we buy bitcoin and hold it, this is our strategy." ”
Talib, author of "The Black Swan Effect" and a professor at New York University, wrote that Bitcoin cannot meet its concepts of anarchic currency, anti-inflation and safe-haven investment, reiterating that bitcoin has zero value.
Is it a matter of opinion, will Bitcoin reach a new high after the adjustment, or will the value return and fall to hell?
The Fed has entered the interest rate hike cycle, there is still a lot of uncertainty about the epidemic in 2022, more and more countries are prohibiting digging pits, and Bitcoin has flashed two crashes in a short period of time, which has given the answer.
Falling below $40,000 is just a small warning, and the bigger storm of virtual currencies may have just begun.