"The coin circle collapsed" was searched again. Recently, the virtual money market suffered a "big robbery". First, Luna coins, known as "currency circle Maotai", have plunged by more than 99%. Since May 11, Luna coins have fallen from above $30 to about $0.0003 in the evening of May 14, close to zero. Virtual currencies such as bitcoin and Ethereum also plummeted one after another. On May 12, bitcoin fell from about $32000 to less than $27000.
The virtual currency, which has always been advocated as "digital gold" and "safe haven asset" by currency circles, has once again proved its high risk and "big foam" with practical actions. The slump was mainly related to the Fed's interest rate hike. The price of virtual money is very vulnerable to liquidity. In the market environment with loose liquidity, speculation prevails and promotes the rise of currency value. Once the market environment changes, the market often turns downward sharply. Since the beginning of this year, the Federal Reserve has started the interest rate hike cycle and tightened global liquidity. In particular, in early May, the Federal Reserve raised interest rates by 50 basis points at one time, which had a negative impact on capital and market sentiment, with virtual currency bearing the brunt.
The sharp rise and fall is the consistent performance of virtual currency. Virtual currency has no real value support, and the price is very easy to be manipulated. Changes in the direction of supervision and the trading of several investment giants can lead to sharp fluctuations in currency value and trigger a large number of selling.
With the efforts of China's regulatory authorities to build a firewall, it has effectively blocked the transmission of virtual currency risk in China. Since last year, the central bank and other departments have issued a series of measures to prohibit financial institutions from carrying out and participating in virtual currency related businesses, clean up and ban domestic virtual currency trading platforms, strengthen the verification and regulation of "mining", comprehensively extinguish the "false fire" of virtual currency speculation, and install a "protective lock" on investors' money bags. The virtual currency was brutally "bloodwashed", which once again proves that the action of China's regulatory authorities is decisive, powerful, timely and necessary.
It should be emphasized that in China, virtual currency transactions are not protected by law. In September last year, 10 departments issued the notice on further preventing and dealing with the speculation risk of virtual currency trading, which made it clear that if any legal person, unincorporated organization or natural person invests in virtual currency and related derivatives, which violates public order and good customs, the relevant civil legal acts are invalid, and the losses caused thereby shall be borne by themselves; Those suspected of undermining financial order and endangering financial security shall be investigated and dealt with by relevant departments according to law. This means that investors rashly "enter the circle", take their own losses and are likely to touch the legal red line.
For an investment target, if there is speculation heat and lack of practical and wide application scenarios, 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, timely extinguish the greed of bottom reading and sudden wealth, and stay away from the speculation of relevant transactions, otherwise they are likely to "lose money".