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On January 20, some articles began to circulate that a "double spend attack" was detected in the Bitcoin block height 666833.

Double spending, that is, double payment, refers to the repeated payment of the same digital asset. The design of the Bitcoin blockchain can effectively prevent double spending, but in extreme cases, for example, by controlling more than 51% of the computing power, hackers can launch double spending attacks and plunder a large amount of cryptocurrency. Therefore, a successful double-spending attack will definitely cause concern in the community.

However, what happened on January 20th was not a double spend attack. The fact is that a user added a fee to replace the previous transaction before the transaction was confirmed.

Generally speaking, this situation is normal. After all, this is a way to solve the transaction being stuck in the mining pool due to the low transaction fee. But as a coincidence, these two transactions have been packaged into different blocks and dug out by two mining pools at the same time, so it looks like a double spend. Due to the competition for the longest chain during mining, the transaction was accepted by only one chain, which means that no double spending occurred.

But that didn't stop the media from reporting it as a "double spend," with widespread chaos and panic inexplicably created.

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On January 21, there was another news that the incoming U.S. Treasury Secretary Janet Yellen (Janet Yellen) stated that cryptocurrencies are mainly used for illegal financing and that such illegal use should be cracked down.

However, this news is also not true and has been taken completely out of context. On the same day, a Chainalysis research report revealed that the use of Bitcoin for illicit activities has dropped significantly in 2020, accounting for less than 1% of all transactions.

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Things have not settled yet, and there is a new round of USDT panic in the market.

Tether Corporation (USDT) has come under attack in the past and remains a target of the U.S. Attorney General of New York and other regulators. But the new round of concerns surrounding Tether distorts how it is being used, and distorts a lot of the data.

A recent article that has gone viral claims that unbacked USDT is being used to manipulate the Bitcoin market, citing extensive evidence of USDT flowing into BTC. But the author of the article did not mention that because of regulatory reasons, USDT is widely used in China and is often used for Bitcoin and other cryptocurrency transactions.

In addition, many reports also mentioned that USDT is being widely used for capital flight and transfer funds. These are all huge sources of USDT activity, but neither is mentioned in the article.

Moreover, because the current wave of market conditions is driven by institutions, only looking at the dollar trading volume of retail investors on exchanges greatly underestimates the amount of dollars flowing into the Bitcoin market.

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While there may be other factors at play in the recent Bitcoin price drop, the FUD did cause some investors to panic sell. On the other side of the market, some sophisticated investors are taking advantage of temporary fear to accumulate more Bitcoin.

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(Number of addresses with BTC≥1000 pieces)

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(Bitcoin inflow of Grayscale Fund)

In addition, asset management giant BlackRock (BlackRock) submitted an application to the US Securities and Exchange Commission (SEC) to participate in bitcoin futures trading, and plans to include bitcoin futures as a qualified investment project in two funds.

V. Conclusion

Whenever there is a big change in the market price, FUD sentiment will flood the entire market. As the world's attention to Bitcoin increases, the degree of FUD will also increase.

The current situation is that retail investors are selling their BTC in FUD, while some big investors do not seem to be scared, and continue to accumulate BTC in various ways, betting on the future of BTC. Which is right and which is wrong, the final time will give the answer.