Bitcoin continues to plummet, Musk is stuck

Recently, Bitcoin has continued to fall. On the 14th, Bitcoin fell below the $21,000 mark, an 18-month low. Behind the collapse of Bitcoin, a group of billionaires lost miserably. Musk is also stuck, and Tesla bought $1.5 billion in bitcoin in early 2021 at a price of about $35,000 per piece.

Global cryptocurrency market cap falls below $1 trillion

Proponents of cryptocurrencies have long touted that cryptocurrencies can be used to hedge against various “uncertainties.” However, in the context of the Fed raising interest rates, the appreciation of the dollar has increased the pressure on the depreciation of risk assets.

According to data from cryptocurrency data provider coinmarketcap, on the 14th, Bitcoin fell below the $21,000 mark, with a minimum drop of $20,950, the lowest level since December 2020, and the latest price is $21,598; Ethereum fell to a minimum of $21,598. $1,164, the lowest since January 2021.

Bitcoin is now down 69 percent since reaching an all-time peak of $68,991.85 last November. If you buy a bitcoin at the highs, the floating loss so far is comparable to the price of a Tesla model 3.

Data shows that the global market value of cryptocurrencies is currently less than $1 trillion.

7 billionaires lost $114 billion

Under the influence of the sharp fall in Bitcoin, the stock of a listed company holding Bitcoin tumbled.

MicroStrategy Inc., a software company that has made buying bitcoin part of its corporate strategy, fell as much as 28% on Monday and was still down 25% at the close.

Over the past two years, MicroStrategy has accumulated nearly 130,000 bitcoins, spending a total of $3.97 billion. According to the company’s latest quarterly filing with the U.S. SEC, the company’s average purchase price for bitcoin has risen steadily since 2020, to $30,700 per coin as of March 31. The latest price is currently $21,598, which also means that MicroStrategy has lost $1.2 billion in bitcoin-related investments.

Microstrategy founder and CEO Michael Saylor said in the middle of last month that Bitcoin “To go into the millions”, and he still said “In Bitcoin We Trust” on Twitter on June 12 .

The continued slump in virtual currency prices has also caused Tesla to lose more money on related investments. According to Tesla’s 10-K filing with the SEC, in the year ended December 31, 2021, due to the company’s Bitcoin As of December 31, 2021, the fair market value of such digital assets held by the company was $1.99 billion.

Bitcoin fell sharply, and another Central American country, El Salvador, suffered a greater loss. On June 13, Beijing time, El Salvador’s finance minister, Alejandro Zelaya, publicly denied the claim that a sharp drop in bitcoin prices poses a threat to the Central American country’s finances. The government of El Salvador has become the first country to recognize bitcoin as legal tender since last September, despite criticism from the International Monetary Fund, and has also purchased a total of 2,301 bitcoins in batches.

In addition, according to the Bloomberg Billionaires Index, since Bitcoin reached an all-time high of nearly $69,000 on November 9 last year, the Bitcoin and crypto markets have fallen to the lowest level in the past two years, and seven cryptocurrency-related billionaires have lost a total of $114 billion.

Tesla CEO Elon Musk is also stuck

In the past two years, some capital giants have also dabbled in cryptocurrencies, including Tesla CEO Elon Musk.

According to Tesla’s annual report filing, as of December 31, 2021, the fair market value of Bitcoin held by Tesla was $1.99 billion.

Musk has publicly stated that he owns some bitcoin, dogecoin and ether, and will always hold bitcoin for a long time, hoping to see bitcoin succeed.

It is speculated that Musk and Tesla hold 42,069 bitcoins. Musk replied: “Not that many bitcoins, but it’s close.”

Musk not only actively holds bitcoin, but also promotes its circulation and use.

In March last year, Tesla’s US website revealed that users could choose to pay in bitcoin when purchasing a vehicle. Bitcoin purchases of Tesla were also terminated in May last year due to concerns over the cryptocurrency’s impact on the environment.

According to previous media analysis, Tesla will buy $1.5 billion in bitcoin in early 2021, at a price of about $35,000 per piece.

Industry insiders: It’s only a matter of time before Bitcoin falls below $20,000

In the eyes of industry insiders, the current bitcoin price seems to be back at the end of 2020, and it was also at the critical threshold of $20,000, but at that time bitcoin was in the stage of rising and relaying, and since then it has continuously exceeded $60,000 within half a year. Now it is a fall relay stage, and it is only a matter of time before it falls below $20,000 in the future.

In his view, the cryptocurrency market, which is not regulated and recognized by governments of various countries, is always a “black market”. The functions of encrypted digital currency include speculation and fraud of altcoins, money laundering and transfer of assets in mainstream currencies, and want to work with gold, oil, etc. Emerging value as a safe-haven asset may still be a long way off. What’s more, under the U.S. dollar interest rate hike cycle, the United States wants to curb inflation through the return of U.S. dollar assets around the world. There is also great uncertainty as to whether it can achieve its goal.

“Just as the three major U.S. stock indexes are currently falling, with the index dropping nearly 30% and the market value shrinking by over a trillion dollars, the cryptocurrency market is also shrinking. But has all the shrinking market value been withdrawn by investors? Obviously not, shrinking The market value of the cryptocurrency market is gone. Of course, investors who escape quickly may keep their principal profits, while investors who escape slowly will lose everything, and the same is true for the cryptocurrency market. The current market value of the cryptocurrency market is only one trillion US dollars. , it will not play much role in the return of US dollar assets.” On June 14, a senior diversified investment fund manager in the Hong Kong market told reporters.