Bitcoin Declines All the Way below $30,000 Mark

Bitcoin, which stabilized briefly after the plunge, fell sharply again. At about 20:30 on June 22, Beijing time, Bitcoin eventually fell below the $30,000 mark.

According to data from Bitcoin quotation website Coindesk, at 20:27 pm on the 22nd, Bitcoin dropped sharply to 29,771 U.S. dollars. The cumulative decline in the past 24 hours reached 9.12%, and it fell to 2,976 U.S. dollars in one day. At this time, $64,829, the highest point in Bitcoin history in April, has been cut below the waist.

Reuters reported on the 22nd that there was a "death cross" on the technical side of Bitcoin. For Bitcoin, the key is whether it can hold the low of $30066 reached on May 19, which is the initial goal of the bears. A break below this level will strengthen the negative signal of a "death cross".

What has caused the market to pay great attention is the recent continuous efforts of Chinese regulators to strengthen the supervision of Bitcoin, and Bitcoin has also fallen continuously.

On June 21, the People’s Bank of China issued a document stating that it has interviewed some banks such as Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, Postal Savings Bank, Industrial Bank and Alipay on the issue of providing services for virtual currency transactions by banks and payment institutions. And payment institutions. The People's Bank of China pointed out that virtual currency trading activities disrupt the normal economic and financial order, breed the risks of illegal cross-border transfer of assets, money laundering and other illegal and criminal activities, and seriously infringe the people's property safety. Banks and payment institutions shall not provide products or services such as account opening, registration, trading, clearing, and settlement for related activities. Institutions must comprehensively investigate and identify virtual currency exchanges and over-the-counter dealers' capital accounts, and cut off the transaction funds payment link in a timely manner.

As soon as the news came out, six institutions issued announcements and stated that they strictly prohibit any institution or individual from using institutional services to conduct virtual currency transactions, and resolutely refrain from conducting or participating in any virtual currency-related business activities. Encrypted currencies in the global market have heard a collective dive.

China has always made it clear that Bitcoin does not have the "legal status" of currency. Previously, it has clearly forbidden the establishment of Internet platforms to provide transactions for Bitcoin and other virtual currencies, and the exchange between virtual currencies and digital currencies is also prohibited.

On December 5, 2013, the People’s Bank of China and other five departments jointly issued the "Notice on Preventing Bitcoin Risks", stating that Bitcoin is not issued by the monetary authority, and it has no monetary properties such as legal compensation and compulsion, which is not true. Currency. The "Notice" prohibits financial institutions and payment institutions from conducting bitcoin-related businesses and reminds individuals to guard against risks, but it does not expressly prohibit individuals from participating. In 2017, the Central Bank and other 7 departments issued the "Announcement on Preventing the Risk of Token Issuance Financing", prohibiting the establishment of virtual currency trading platforms in China and prohibiting the exchange between virtual currency and legal currency. Subsequently, large-scale virtual currency trading platforms in China have been shut down.

Recently, the Chinese authorities have continued to tighten the supervision of cryptocurrencies such as Bitcoin. On May 21, the Financial Stability and Development Committee of the State Council held its 51st meeting and proposed to crack down on Bitcoin mining and trading activities and resolutely prevent the transmission of individual risks to the social field. Since then, Inner Mongolia, Qinghai, Xinjiang, Yunnan and other places have successively introduced measures to combat and punish virtual currency "mining" behavior. On June 20, it was reported that all bitcoin mines in Sichuan were collectively cut off at midnight that day, and bitcoin miners suffered huge losses as a result. The industry believes that the withdrawal of all domestic bitcoin mines is a foregone conclusion.

At the same time, Bitcoin has started this round of vigorous decline in the market, and finally fell below the $30,000 mark on the evening of June 22.

The legitimacy of Bitcoin's identity has always been suspected by global financial official decision-makers, who believe that it has caused chaos to the existing international financial order. The most important thing to ignore is the attitude of the new US Treasury Secretary Yellen, who has always held a negative attitude towards Bitcoin. On January 25, Yellen’s appointment was considered bad news, causing cryptocurrencies to plunge across the board that day, and Bitcoin dropped more than 10% at its lowest point in the day. Prior to January 19, Yellen stated that the United States should be aware of emerging tools for terrorist financing, and that cryptocurrencies have the opportunity to be misused by illegal financing. The government will need to review the ways in which their use can be restricted and ensure that they will not be carried out through these channels. Money laundering activities. Yellen's statement made Bitcoin fall for three consecutive days. And another international financial policy decision-making figure, former President of the European Central Bank Draghi, also has an unfriended attitude towards Bitcoin. Almost at the same time as Yellen, he also stated that Bitcoin is a highly speculative asset that involves money laundering activities, and a regulatory consensus on Bitcoin needs to be reached at the global level.

How Bitcoin's ups and downs disturb chips market?

Virtual currencies mining consumes chips, so the global shortage of chips is Bitcoin's fault? This may not be the case.

Determined to refrain from Bitcoin or any other virtual currency, I thought that all the fuss over cryptocurrencies had nothing to do with me. The painful truth is that as Bitcoin fell, Micron and other chip stocks seemed to follow.

Since Bitcoin hit a high of $63,518 in April, it has started to fall all the way, and is currently standing at around $38,000. At the same time, DRAM prices began to fall almost simultaneously.

The price index of 4GB DDR3, which is composed of 8 512M DRAM particles, began to fall after the high point in March, which is very similar to the price trend of Bitcoin.

DRAM DDR3 4GB 512Mx8 1600MHz Price Index

Bitcoin's plummeting, will bring down DRAM prices?

DRAM prices rise with Bitcoin?

Looking backwards, the price trend of DRAM and the price of Bitcoin do have a certain correlation.

For example, last year, Bitcoin started in October, rose for half a year, and peaked in March; and the DXI index, which represents the prosperity of DRAM prices, started a month later than Bitcoin, and started at the end of November last year. , The rising slopes of the two are very similar.

Then looking forward again, the last wave of Bitcoin's bull market started in September 2017, and it doubled by 5 times in December, with the price rising from $3,500 to $19,000. The price of DRAM also rose again after the consolidation in June-September 2017, and peaked at the same time as the price of Bitcoin in December, and also fell at the same time.

China "Extinguishes" Bitcoin Mining Enthusiasm

The two countries with the greatest influence on cryptocurrencies in the world are China and the United States. China’s policy is absolutely crucial.

After reaching the historical high in April this year, the price of Bitcoin has plunged all the way. The overweight of China's regulatory policies in mid-to-late May is undoubtedly one of the incentives.

Starting on May 18, China has intensively released its regulatory policies on cryptocurrencies: On May 18, the Inner Mongolia Development and Reform Commission established a virtual currency "mining" corporate reporting platform; on the same day, China Internet Finance Association, China Banking Association, China Payment and Clearing Association Issued the "Announcement on Preventing the Risks of Virtual Currency Trading Hype"; On May 21, the State Council’s Financial Commission requested to crack down on Bitcoin mining and trading, and resolutely prevent individual risks from being transmitted to the social field; On May 26, the Inner Mongolia Development and Reform Commission issued a resolute Eight measures to combat and punish virtual currency "mining" behavior solicit opinions. 

In September 2016, 550 Bitcoin mining machines operated day and night in a computer room in Sichuan, China

From 2013, when bitcoin transactions were still regarded as commodity trading behaviors that ordinary people can freely participate in, to the withdrawal of domestic virtual currency exchanges in 2017, and to the clear crackdown on mining behavior, China’s regulatory policies on cryptocurrencies are in The most stringent among the major economies in the world. In view of the influence of Chinese players in the cryptocurrency world, every statement made by the Chinese regulators will directly reflect the large fluctuations in the value of Bitcoin.

Chinese regulation shakes up Bitcoin prices

"The price of Bitcoin is like a child’s face. Whenever it changes, it often rises and falls." A former Bitcoin “mining farm” told a reporter from China News Weekly. Because of a sharp drop in the price of Bitcoin, his The "mine" was at a loss and was shut down before the outbreak of the epidemic in 2020. At that time, the price of Bitcoin was hovering at US$7,000 or 8,000. He also missed the Bitcoin market that started in the middle of last year.

By the end of 2020, the price of Bitcoin has been close to 30,000 U.S. dollars. This trend will continue in 2021 until it hits an all-time high of 64,863 U.S. dollars on April 14.

Sleepless Night in Crypto Coin Circle: 770,000 Investors in Liquidation

 How does the Bitcoin market go? At present, pessimism in the market has the upper hand. Ipek Ozkardeskaya, a senior analyst at Swissquote, said that as Bitcoin falls below the 200-day moving average, there will be more risks in the future.

The crypto coin circle had no sleep all night. According to the latest data of bybt, in the last 24 hours, a total of about 775,700 investors have become victims of liquidation in China. The largest single liquidation order occurred in Huobi-BTC, valued as high as US$67,001 million. On the evening of May 19, the ranking of the "coin circle collapse" jumped to the third place on the Weibo hot search list. Prior to this, the China Internet Finance Association and other three associations jointly issued an announcement to remind the risk of speculation in crypto coin transactions.

Prices Plummeting of Crypto Coins

On the morning of May 19, the price of Bitcoin dropped sharply. As of 11:07, the price of Bitcoin had fallen by 10.73%, which was only a gap of more than $200 from 40,000 USD per coin. You know, in April this year, the price of Bitcoin At one time, it exceeded 60,000 US dollars/piece; at the same time, the price of Ethereum also fell by 8.75%, and the price was close to 3,000 US dollars/piece. Just a week ago, its price once exceeded 4,000 US dollars/piece.

However, this was just the beginning of the "nightmare". By noon on the 19th, the price of Bitcoin fell below $40,000 per coin. After 8:30 in the evening, the price of Bitcoin dropped in a free fall, with the lowest price in 24 hours. 31,100 US dollars per piece, which has been "cut in half" compared to the highest point this year. As of 23:18 on the 19th, the price of Bitcoin has rebounded to 36,900 US dollars per coin, down 15.33%.

Other crypto coins were not spared either. The price of Ethereum plummeted by 21.02% to US$2,657 per coin, and Binance Coin fell by 28% to US$367 per coin. The previous hot Dogecoin was not spared and fell. 23.79%.

Bitcoin price rides a roller coaster due to Musk's Fickle attitude

 In several recent tweets, Musk released news about Tesla's bitcoin holdings, which triggered investors to engage in crazy bitcoin transactions during the trading hours, first shorting, and then turning to buy up.

The reason is that Musk hinted in a tweet that Tesla may have sold or partially sold its bitcoin holdings; later he clarified in another tweet that Tesla did not sell bitcoin.

Musk’s tweet directly led to Bitcoin’s flash crash of over 9% on May 17, hitting its lowest point since February 9, and then rising by more than 5%.

Although Musk's enthusiasm for speculating coins once pushed up the cryptocurrency market, his recent "cold" attitude towards Bitcoin and Dogecoin has disrupted trading in the currency circle.

Earlier, Musk had tweeted that out of environmental considerations, Bitcoin would cease to be used as a payment method for Tesla vehicles, causing Bitcoin's market value to evaporate by a quarter.

Musk has repeatedly changed his face. Bitcoin prices are on a roller coaster. Click on the video to see what it is!

Currency war behind chip supply cut: Bitcoin's attack on finance and industry

 A hot virtual currency "digital game" is impacting the financial order and industrial resources in the real world.

In the past few days, the prices of Bitcoin and other virtual currencies have soared and plummeted. At the same time, following the introduction of OTC trading and futures contract trading product services by virtual currency exchanges, various so-called "financial management", "lending" and "fixed income" products around virtual currencies have also continued to emerge. These are similar to traditional finance but are not The virtual currency "financial services" provided by licensed institutions are unprecedentedly popular.

In addition, "mining", the original method of directly obtaining virtual currency, has also become the focus again. In the past few years, the “mining machines” that have been closed in the bear market have turned into sweet pastries again, and some A-share listed companies have invested tens of millions of dollars to deploy the coin mining market. Under the competition for computing power between major mining pools (collection of computing power) and mining farms (collection of hardware equipment), not only chips, hard disks, graphics cards and other resources are quickly swallowed up, but also power resources such as firepower and water power in various places are also annihilated. In the sound of the rumbling of the mining machine.

An "involved" coin mining market is having a serious impact on the real world...

Crazy hype: The virtual currency expands wildly

The "rise" of financial derivatives in the currency circle began with the upsurge of opening virtual currency exchanges around 2015. The virtual currency-related derivatives launched by virtual currency exchanges mainly use futures-like contract trading methods to go long or short virtual currencies and other virtual currencies.

What are the frontiers and future trends of Bitcoin, Ethereum, and blockchain?

As the discussion of whether Ethereum (ETH) will replace Bitcoin (BTC) as the leading cryptocurrency  becomes hot part of the daily cryptocurrency conversation, we need to ask a question,  what the difference between Ethereum and Bitcoin imply for the future application of blockchain and encryption?

Bitcoin and Ethereum

Since blockchain and cryptocurrency have actually become part of the financial market, Bitcoin has always been the market leader, the initiator of dialogue, and the dominant force measured by any standard.

Given that the market value of Bitcoin has exceeded $1 trillion, well-known companies such as Tesla have also made major acquisitions, and major payment applications have also begun to support Bitcoin payments, so is it reasonable to conclude that Bitcoin's dominance is almost certain.

However, on the other hand, the valuation of Ethereum and the applications developed based on the Ethereum blockchain are rising rapidly. If you put aside the attention to prices that attract market analysts and participants every day, Ethereum and the Ethereum blockchain are indeed the protagonists in the second half of 2020 and 2021.

In addition to the current price increase of the Ethereum token, many blockchain applications that have attracted the attention of the mass market have been developed and run on the Ethereum blockchain.

Although Bitcoin has been leading the wider attention, there is a phenomenon that can be proved, in terms of applications and use cases, Ethereum will lead the next stage of blockchain development. In other words, in the financial market dialogue, it seems that for the first time there will be open competition to determine which protocols and cryptocurrencies will lead the industry forward. Let us analyze some basic factors that the market needs to evaluate in the future.

New Technology to Watch amid Bitcoin's Price Rising and Chip Shortage

 Following the previous round of sharp decline, the price of Bitcoin ushered in a sustained surge. Previously, economist Alex de Vries mentioned in Joule that the soaring price of Bitcoin may increase energy consumption and lead to further global chip shortages.

Alex de Vries believes that Bitcoin "mining" can be understood as the process of harvesting cryptocurrency by solving complex mathematical equations. As long as it is a networked computer, you can participate in "mining", but the success depends on the computing power of the equipment and the cost of electricity. As everyone is optimistic about the Bitcoin market, more and more people join "mining". It is estimated that starting from January 11, 2021, the number of times that all "mining" equipment solves this equation per second adds up to more than 150 million to the fifth power, which will greatly consume electricity and other energy.

Previous statistics have shown that "mining" has accounted for 0.13% of global electricity consumption. 80% of the total expenditures of cryptocurrency miners around the world are spent on electricity costs. Alex de Vries believes that based on the Bitcoin market in January, the entire Bitcoin network may consume up to 184 TWh (1 TWh ≈ 1 billion kWh) of energy each year, which is equivalent to the total energy consumption of all data centers in the world. quantity. At the same time, the energy consumed by "mining" also produced 90.2 million tons of carbon dioxide, which is a huge energy consumption.

Learn about Bitcoin mining machine, from PC to chip

Mining machines are tools used for mining. You can regard these tools as a dedicated computer. The PCs we use every day can help us run various software, open office when we want to work, and open various game software when we want to play games.

The mining machine is also a computer, and only one kind of software can run on it is the liquidation guessing software of the Bitcoin network. Because the mining machine only does this thing, this thing can be done extremely professionally.

Humble beginning of BitCoin mining

In 2009, shortly after Bitcoin came out, any PC user can participate in the prize-winning guessing game on the Bitcoin network. At that time, the reward for each guessing was 50 bitcoins. Now it seems that 50 bitcoins are more than a huge sum of money.

But you have to know that Bitcoin in 2009 was worthless. The first ever BitCoin transaction was a dear man bought a hamburger. with 100,000 Bitcoins. Presumably, those who participated in Bitcoin mining in 2009 were all technical geeks in the early days. They were mining for fun as well. In 2010 when one of my alumni was still in school and exposed to Bitcoin relatively early, he made the most correct decision in his life in 2010: secretly installed a Bitcoin mining software on his minicomputer in the laboratory.

Because the minicomputer has the advantage of crushing performance compared to the PC, he mine a lot of bitcoins in 2010, and have not sold them out yet. The arms race for Bitcoin mining has started since then.

Graphics Card Mining

Starting in 2011, more technical geeks began to join, and they found that remodeling the circuit board of the graphics card from an ordinary PC would have a very high cost performance in mining. This is Graphics Card Mining. The performance of the graphics card mining machine is greatly improved compared to the PC, and it also reduces a lot of unnecessary power consumption, and the economy is much better than that of the PC mining.

Beginning with graphics card mining, professional miners began to appear. These professional miners went to the second-hand market to collect old graphics cards, and then transformed them into professional graphics mining machines, and went to the country to find low-cost power and purposeful mining. Around 2013, I personally participated in an FPGA project. Since the mining of graphics cards was already in full swing at the time, experts in chip manufacturing have also joined in.

FPGA Mining

After all, the main job of the graphics card is not for mining, so there are still some parts in the graphics card that are wasted and not used. For those who make chips, it is a crime to add a transistor for useless functions, which will waste electrical energy, which is money. Because it is too expensive to make a chip directly, these chip experts first made an FPGA in a simulation environment. FPGA can be regarded as the predecessor of the chip, because FPGA is dedicated to mining, so the performance aspect has the advantage of crushing compared with the graphics card.

It is great that FPGAs just came out for mining, but within a few months, a dedicated mining chip came out. The chip is a serious tool dedicated to mining, and it has a generation difference compared to the half-dead FPGA. So our FPGA was eliminated before the cost was recovered. It can be considered that the era of mining with PCs and graphics cards is a feudal era, and every miner can mine on a small scale. When mining enters the era of chip mining, it is the age of empires. A single miner has been unable to keep up with the times, and some miners have gradually developed into group mining, that is, Mining Farms.

Mining Chips

This is explained in detail below. We still come back to say that even if the miners are in the age of empires, they are divided into the steam age, the electrical age, and the information age. The latter ages have a crushing advantage over the previous ones. When mining entered the chip era, mining tools, that is, mining machines, have been evolving. You must have heard of the concepts of 40-nanometer chips and 16-nanometer chips. The so-called nanometer is the manufacturing process of the chip. I will not explain in detail the things in the integrated circuit here. You just need to know that in general, the smaller the chip is, the lower the power consumption. To make the chip smaller, the best way is to make the circuit inside the chip fine. 40 nanometers means that the circuit line width in the chip is 40 nanometers, which is about the minus ninth square meter, and the width of a hair is 50,000 nanometers.

You heard that right, about 1,000 pieces are put together with circuit wires, and there is only one hair as wide as that. From the birth of chip mining, the competition of chip manufacturing process began. From the beginning of the 40-nanometer chip, the continuous evolution has gradually evolved to now that the 7-nanometer chip has become the mainstream. Some miners are still studying the 5nm process. When the 5-nanometer process is reached, the arms race for chips is approaching the end, because the 5-nanometer process is already the most advanced technology available to mankind. If you want to break through the 5-nanometer process and make the circuit thinner, you will reach the limit of the laws of physics. There will be many complex interactions between circuits. It is no longer necessary to improve the production process as before, but it requires physicists to break through the physical theory.

So we can conclude this: Before the advent of quantum computers, our existing chip technology was close to tapping all its performance potential. The cost of chip development is extremely high  and the technical requirements are daunting as well. So there are not many mining machine manufacturers so far. 

The following 3 companies are among the major mining machine manufacturers: 

The first one is the legendary Bitmain. This company once launched an excellent mining machine S9 in 2017. S9 was so good that it crushed almost all competitors, Bitmain once occupied 70% of the market share. Later, as the company's core technical staff left and suffered infighting, and the failure of seeking to go public, Bitmain is not as good.

The second is Whatsminer mining machine. The founder is the technical expert who developed  the Antminer S9 mining machine for Bitmain. Because of the unfair distribution of benefits, this expert quitted and founded Whatsminer. This is a new mining machine manufacturer in the market, and grows very fast.

The third is Canaan Creative, the oldest mining machine manufacturer. The development of this mining machinery business is low-profile, and it is currently listed on the Nasdaq. In addition to these three mining machine vendors, there are some other small mining machine vendors with a small market share, so I won't introduce them here. As for the overt and secret fights between mining machine vendors, there are many bloody stories, so I won't introduce them in this chapter. See you tomorrow!

Tesla Accepts Bitcoin Payment, But Tax is a Problem

Tesla CEO Elon Musk officially announced on his Twitter account on Tuesday that the purchase of Tesla cars in the United States can be paid with Bitcoin. This is also another big step after Tesla announced that it has purchased $1.5 billion worth of Bitcoins last month. In addition, he also stated that the Bitcoin car purchases Tesla received will not be converted into legal tender, and will remain in Bitcoin.

According to the customer support page of the company's official website, customers who buy cars with bitcoin must pay through their bitcoin wallet. Underpayment or omission will result in cancellation of the order, and other digital currencies are currently not supported.

As for when customers outside the United States can enjoy the service, Musk said that it can be done "later this year", but he did not specify which countries or regions will be supported.