By | Ratchet Bisslinger
By | Ratchet Bisslinger
On March 12, the digital currency market fell into a black hole.
Today, Bitcoin fell by more than 30%, the largest single-day drop in six years. The plunge happened at night. In 15 minutes, Bitcoin once plummeted by 20%, and the market value of more than 20 billion was wiped out.
"Bitcoin dropped by $300 after one bite of food, and I was so scared that I didn't even dare to eat." Some investors lamented.
The outside world speculates that the cause of the currency market earthquake comes from the OTC (over the counter) market.
Aftershocks in the digital currency market will continue.
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"Black Week"
On March 12, Bitcoin ushered in its largest one-day drop in six years. According to data from the Huobi Exchange, the highest price of Bitcoin today was $7,959.45, and the lowest price fell to $5,555.55. The biggest daily drop once reached 30%, far exceeding the drop on "September 4" in 2017.
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Bitcoin trend today (source: Huobi)
According to CoinMarketCap data, the last single-day highest drop in Bitcoin was in December 2013, when the price of Bitcoin was only $600, and it once fell 38% in one day.
Some players in the currency circle said that when the currency price plummeted, they were eating. After taking a bite of food, Bitcoin dropped by $300, which scared him so much that he didn't dare to eat.
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02 Sorrow is everywhere.
In June 2019, the price of Bitcoin once reached the highest point of the year at $13,986. Today, under the anticipation of the halving market in the currency circle, the price of Bitcoin has also been "halved".
"The sharp drop tonight is the worst for the contract players." A player in the currency circle said. The contract trading pages of Huobi and OKEx were stuck for a while.
According to data from Jinguozi, in just one hour, OKEx lost $297 million, including $210 million in BTC; Huobi Global lost $117 million, including $52.719 million in BTC; The position is 644 million US dollars.
The decline of BCH and BSV even surpassed that of Bitcoin, reaching 39% and 46% respectively.
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Digital currency decline on March 12 (source: Huobi)
Due to the rapid plunge, the term "BTC" has become a hot search on Weibo. This is the second time in a week.
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03 reason
"In 15 minutes, the drop exceeded 20%. Such a rapid crash must have nothing to do with the macro market." Sun Sheng, an investor in the currency circle, told Yiben Blockchain, "This plunge cannot be blamed on the epidemic and US stocks. It is someone inside the currency circle who is smashing the market."
"From our monitoring of the digital currency market, the reason for this plunge is mainly from the OTC (over-the-counter trading) market." Wang Chaoliang, a senior network security expert, told Yiyi Blockchain, "Many OTC merchants are selling assets in a panic. , causing the market to plummet.”
A few days ago, OFAC (Office of Foreign Assets Control of the U.S. Department of the Treasury), the U.S. regulator responsible for overseas economic sanctions, issued an announcement stating that two Chinese bitcoin merchants will be sanctioned by OFAC for allegedly providing money laundering services for North Korean hackers.
According to OFAC, North Korean hackers laundered money through Chinese bitcoin merchants after stealing assets from exchanges in Japan and South Korea. Yesterday, the Japanese police announced the arrest of two Japanese nationals. They were arrested for purchasing unknown digital currencies on the dark web. These coins may be related to the theft of the Japanese exchange Coincheck in 2018.
Being sanctioned by the United States is a devastating blow to many OTC merchants—this means that their dollar assets will be frozen, they will not be able to do business with Americans, and they will not be able to do business with financial institutions in most countries in the world. But they themselves, and even their spouses and immediate family members are not allowed to enter the United States.
The Chinese sanctioned by the United States are not hackers, but ordinary OTC merchants. Therefore, in the entire OTC circle, merchants are in panic.
US sanctions are just the beginning. Many domestic OTC merchants worry that the US sanctions will attract the attention of domestic regulators. "Someone may be caught because of this." OTC merchant Chen Rui told Yiben Blockchain.
"Digital currency exchanges are easy to attract the attention of criminals and money laundering gangs. Many exchanges do not have anti-money laundering capabilities, and it is difficult for OTC merchants to fully protect themselves, so accounts are frozen from time to time." Wang Chaoliang said.
"Domestic OTC merchants must still do more domestic business. Everyone is unwilling to touch black money, but they will more or less encounter black money. This is something that can't be helped." Chen Rui said.
The OFAC announcement shows that OTC merchants surnamed Tian transferred assets worth $34 million through bank card accounts in China. If this fact is true, it is almost certain that some OTC merchants cannot escape domestic legal sanctions.
Panic reached a crescendo this afternoon. Several investors broke the news that there was a wave of card closures on a large scale in the OTC trading area of some exchanges, and many large households and OTC merchants began to sell assets, which directly triggered the Bitcoin flash crash tonight.
In terms of bitcoin spot trading, Huobi, OKEx, and Binance have been chasing each other, but the industry recognizes that Huobi OTC has a larger market size than the other two. However, this evening, the Huobi OTC trading area was close to a shutdown.
In this regard, Huobi told Yiben Blockchain that the system had returned to normal at 21:40 on the 12th, and the abnormal transfer in the OTC trading area had been processed in the early morning of the 13th.
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04 Panic
In fact, during this week, the digital currency market was in extreme turmoil.
On March 9, the international financial market ushered in Black Monday. With the spread of the new crown pneumonia epidemic around the world, US stocks and crude oil markets have plummeted. Within a week, U.S. stocks melted twice, which is rare in history.
Bitcoin, regarded by some as "digital gold", was not spared either. In two days, the price of the currency fell by 16%. What is unimaginable is that three days later, the currency circle ushered in another plunge, and hit the highest level in 6 years.
"Frying in coins is not as good as speculating in the capital market. The only time when the financial market collapses is despair, and currency speculation is in despair almost every day." A player in the currency circle sighed with emotion.
The sudden plunge caught many players off guard and even unacceptable.
At noon today, Sun Sheng posted a circle of friends, listing the trends of multiple assets such as US stocks, gold, crude oil, and Bitcoin since the beginning of this year.
"Bitcoin is up 10%, the best of all assets," he commented.
However, a few hours later, Bitcoin suddenly plummeted, becoming almost the worst performer of all assets. "Sorry, I made everyone laugh." Sun Sheng posted another self-deprecating post on Moments.
"Digital asset investment is not suitable for most people. Be careful! You can't do it if you have a weak heart!" Li Xiaolai said on Weibo.
The founder of F2Pool, Shenyu, posted a falling K-line chart on Weibo, with the text: "Young people's first long order."
