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Seven global billionaires lose $100 billion in bitcoin’s epic plunge

Seven global billionaires lose $100 billion in bitcoin’s epic plunge

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Recently, the world’s No. 1 virtual currency, bitcoin, plunged all the way to June 19, falling below the $18,000 mark and probing to its lowest in two years. Although the value of the currency rebounded slightly to around $21,000 on the 21st, there is still a big gap from the peak of $69,000 last November.

Some netizens say that money evaporates faster than water, and that virtual currencies are a drumming game of “drop wisdom”. Is this really the case?

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The “Richest Chinese Man” Evaporates 580 Billion RMB

“If you dump a bitcoin you bought at its peak value of $69,000 now, you’ll lose $49,000 (about RMB 320,000), enough to buy a Tesla Model 3.” Some marvel.

The historic loss rate has led to heavy losses for players, with some jokingly saying that bitcoin billionaires are “returning to poverty overnight. According to the Bloomberg Billionaires Index, the seven billionaires associated with the cryptocurrency have lost a total of $114 billion from the “high point” of the bitcoin price last November to today.

The most notable “slimmer” is CZ, the founder of Binance, the world’s largest cryptocurrency exchange, who was the richest Chinese person at the end of last year with nearly $96 billion. As of June 15, Zhao’s fortune has plummeted 89.3% this year, evaporating $85.6 billion (about 580 billion yuan) as Bitcoin has collapsed.

As a well-known holder of bitcoin, Tesla has also suffered serious losses in this wave. Data shows that Tesla currently holds 43,200 bitcoins, worth $968 million, and has lost about $530 million investing in bitcoin.

What’s more, El Salvador, a country that uses bitcoin as legal tender, is facing huge financial risks due to the shrinking value of the currency. El Salvador’s government previously bought 2,301 bitcoins one after another.

Data from nayibtracker.com shows that the total cost of El Salvador’s coin purchases was $105 million, with an average purchase price of nearly $46,000 per coin. At the latest coin price ($20,453.57), El Salvador’s bitcoin holdings are already floating at a 55.45% loss.

 Who brought the cryptocurrency to its knees?

In fact, it’s not just Bitcoin that has experienced the crash, but many cryptocurrencies as well. For example, ethereum, the second largest cryptocurrency, fell below $1,000 on June 18, returning to the “triple-digit” era and hitting a low of $880. The luna coin, which had a market value of $41 billion, also experienced a diving depreciation, with its price dropping from nearly $90 to less than $0.0001.

Multiple analyses point out that high inflation and interest rate hikes by many central banks have inspired investors to worry about a recession, with demand for risk aversion rising in financial markets and a large amount of capital flowing out of the cryptocurrency market, such as bitcoin, causing prices to fall sharply recently.

More worryingly, under the gloom of capital withdrawal, some investors have recently been unable to withdraw funds from some cryptocurrency exchanges, leading to more intense fears about virtual currency liquidity.

For example, Binance suspended bitcoin withdrawals for a few hours last week, saying that some transactions were stuck, and cryptocurrency lending giant Celsius, which has 1.7 million users, announced that it was suspending all withdrawals, swaps and transfers between accounts due to “extreme market conditions.

So, is the freezing low bitcoin a bottoming out opportunity? According to Sam Callahan, an analyst at bitcoin exchange Swan, bitcoin could fall more than 80% from its all-time highs, based on the experience of previous bear markets. This means bitcoin will fall to $13,800.

In addition, based on historical experience, bitcoin has often seen a large amount of money come in after a big drop to try to bottom out, but now the flow of money is the opposite, and these funds are also leaning towards continuing to exit the crypto market right now.

However, there are some veteran players who expect the market to regain stability who are still waving the flag, such as Musk’s post on the 19th in support of his longtime favorite dogcoin, which saw its price pull up 8% in response. However, after accounting for the rebound, the cumulative year-to-date drop in dogcoin is still over 60%.

Dogcoin co-founder Jackson Palmer also recently said in an interview that the bottom of the cryptocurrency “house of cards” has “started to crumble.

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Bitcoin is a “fool’s game”?

Bitcoin’s sudden plunge has once again called into question the underlying logic of its operation.

Warren Buffett, the “number one opponent” of cryptocurrencies, has said that bitcoin is not a productive asset and does not produce anything tangible. The crypto-digital asset market, which exists in a virtual world, is often weak in the face of crises, and any negative event will be magnified.

Warren Buffett also said outright that he would not buy all the bitcoins in the world even if the total price was only $25.

On June 14, Microsoft founder Bill Gates said at an event that the cryptocurrency project is a scam based on the “greater fool theory”. That is, investors can make money even if their assets are worthless junk as long as they find someone even more foolish to take over their assets.

There is no doubt that most bitcoiners entered the market with the idea of making money, after all, there are so many myths of “wealth creation” in this space. However, Bitcoin’s sudden plunge is once again indicative of the potential risks in the virtual world.


Post time: Jun-27-2022