(Original title: tragic! Last night, 220,000 people fell asleep without Bitcoin, causing the wealth of seven billionaires to evaporate by $114 billion)
Financial Associated Press | Blockchain Daily, June 14th (reporter Xu Cihao Dong Yujia),On June 14, the latest market data showed that Bitcoin once fell below $21,000 a piece, and strangled back and forth at this point. As of press time, Bitcoin’s 24-hour decline has reached 18.36%, at $21,089 per piece, and Ethereum has fallen by 17.22% to close at $1,122.46.
With the sharp decline of cryptocurrencies such as Bitcoin and Ethereum, the total market value of cryptocurrencies has fallen below one trillion US dollars.
According to Coinmarketcap data, on June 14, the total market value of cryptocurrencies has shrunk to $898.1 billion, a 24-hour retracement of 14.27%, and a loss of nearly $2 trillion from the peak of 2.8 trillion in November 2021.
227,800 people evaporated $1.17 billion overnight
With the advent of extreme market conditions, the liquidation of derivatives has become a booster for sharp rises and falls.
According to the market data of the third-party service provider bcoin, a total of 227,800 people have liquidated their positions in the past 24 hours by US$1.17 billion, of which the bitcoin contract has been liquidated by US$296 million, and the Ethereum contract has been liquidated by US$419 million.
Among them is the clearing data of DeFi. On June 14, according to the data of the masters on the Ouke cloud chain, the mainstream DeFi lending agreement has cleared more than 10 million US dollars in the past 24 hours. Of this, Aave liquidated $3.72 million and Comppond liquidated $5.9 million.
In addition, according to Jiang Jinze, director of the Muse Research Institute, on social media, according to parsec data, if ETH continues to fall, the liquidation pressure from DeFi protocols will be at most 900 million US dollars, mainly concentrated in the range of 1100 to 1200 US dollars, AAVE and MakerDao each has around $350 million, and Compound has $170 million.
“However, these two loan agreements should be the first 50% liquidation, and they will not be sold all at once.”
In addition, Kanazawa said that WBTC’s DeFi liquidation threat is mainly in MakerDao, pay attention to around $20,300, there will be $340 million in liquidation, and AAVE and Compound will contribute $70 million in selling between $21,800 and $22,800.
Zhao Wei, a senior researcher at the Ouyi Research Institute, told the Blockchain Daily reporter that there are many factors that affect the recent market downturn. One of the main factors is that the US CPI index announced last week hit a new high in 40 years, exceeding the market. expected.
Zhao Wei analyzed that this not only means that the previous Fed rate hike did not meet the desired inflation suppression target, it is likely that the Fed’s June meeting on Wednesday will not only insist on monetary tightening, but also the rate hike will be based on the expected 50 basis points. Further radicalization is possible.
“Rising interest rates means outflow of funds for the investment market, which is reflected in the continuous decline of the overall currency price in the crypto market; it also means that other secondary investment markets such as the crypto market need to continue to digest the consequences of the fall in U.S. stocks caused by the CPI exceeding expectations. .”
In Zhao Wei’s view, the main factor behind the crash this time was the stETH de-anchoring, which led to a large number of ETH smashing into the “hunting” of stETH, which led to a series of crashes.
It is reported that the Lido project specifically provides users with ETH liquidity staking services. Users can lock any amount of ETH, and then receive the equity token “stETH” to earn income in DeFi. After the Ethereum mainnet upgrade is complete, users can exchange their ETH back.
Investors in Lido are all top VCs in the crypto circle, namely a16z, Alameda Research, Coinbase, Paradigm, DCG, Jump Captial and Three Arrows Capital.
Since each stETH can only be redeemed through the listing of the Ethereum beacon chain. Until then, the 12.8 million ETH in the ETH 2.0 staking contract was illiquid. And Lido holds 32% of the 12.8 million ETH (about 4.1 million).
Then in theory, each “stETH” should be equal to one ETH, and the price ratio should be 1:1. But around June 10, its liquidity was tilted, and the price of stETH was also de-pegged, and its value fell to 0.95 ETH. A large number of participating financial institutions began to withdraw funds and flee.
It is worth noting that the financial institution Celsius is the whale holder of stETH.
However, Celsius has been repeatedly attacked by hackers in recent years, with a loss of more than 120 million US dollars, and its users also lost 500 million US dollars in assets in the UST project that just stormed.
On October 8, 2021, Celsius reported that its AUM exceeded $25 billion. Since Celsius is a private company, only its 19 and 20 years of financial data have been released.
Celsius may face liquidity risk due to losses from previous hacks. And the market already thinks Celsius is on the verge of bankruptcy.
In the opinion of Gu Yanxi, a senior bitcoin scholar, Celsisus is illegally raising funds because he invests in public cryptocurrencies and returns 80% of the profits to investors. But if the investment is risky, it can’t pay, so it’s more of a Pond’s.
“Projects like Luna, Celsisus that promise high returns must stay away.”
Gu Yanxi further explained to the reporter of Blockchain Daily that in the current bear market state, the Federal Reserve is increasing leverage, so all institutions with high leverage will liquidate their positions one by one. In a regular recession, many companies go bankrupt.
Gu Yanxi believes that such a wave of bankruptcy has not yet begun. At this time, the most important thing is cash and cash flow.
Seven billionaires lost a combined $114 billion
Under the influence of the Bitcoin crash, the stocks of many listed companies that hold Bitcoin plummeted.
MicroStrategy’s U.S. stocks closed down more than 25% on Monday, local time, at $152.15. The company’s stock has been highly correlated to Bitcoin since Michael Saylor began adding Bitcoin to the company’s balance sheet in August 2020 as a hedge against inflation.
As of press time, Bitcoin is worth $21,089 per piece, and the value of Bitcoin currently held by MicroStrategy is $2.786 billion. According to the company’s latest quarterly filing with the U.S. Securities and Exchange Commission (SEC), the company’s average purchase price for bitcoin has risen steadily since 2020, with a total of 129,200 bitcoins at an average price of $30,700 as of March 31. currency. This also means that MicroStrategy’s bitcoin-related investment losses amounted to nearly $1.3 billion.
According to the data of the masters on the Ouke cloud chain, in addition to MicroStrategy, Tesla lost more than 400 million US dollars in bitcoin investment, and Hong Kong stock Meitu lost nearly 30 million US dollars. 11 other listed companies invested in bitcoin with varying degrees of loss.
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.
As shown in the picture below, the seven billionaires are Changpeng Zhao, founder of Binance Exchange, Sam Bankman-Fried, founder of FTX Exchange, twin brothers Cameron Winklevoss and Tyler Winklevoss of Gemini Exchange, Brian Armstrong and Fred of Coinbase Exchange Ehrsam, MicroStrategy CEO Michael Saylor and Fortress Investment Group’s Novogratz.
Legend: 7 billionaire wealth changes
This round of market tumble exceeded most investors’ expectations. Cai Kailong, a financial technology research expert, analyzed to the blockchain daily reporter that the second round of the currency circle’s sharp fall can be analyzed from three aspects: long-term, medium-term and short-term.
The long-term reason is the Fed raising interest rates and shrinking its balance sheet. Because the inflation rate is too high, in order to fight the inflation rate, the Fed raises interest rates and shrinks its balance sheet. This is a long-term trend that will not change for at least half a year to a year.
The reason for the mid-term is that, under this general trend, many projects with weak foundations, or high leverage, or projects that can only survive by taking advantage of the bull market, such as the thunderstorms of UST and Luna, have caused the entire currency circle. Many influences, including capital, liquidity, emotional panic.
Because of the UST and Luna thunderstorms, everyone was extremely nervous, so as long as there was trouble in a project, everyone would panic. So when STTH has these liquidity crises, it will affect all projects, especially Ethereum. It can be seen that Ethereum has fallen a lot in the past two days.
The short-term reason is that U.S. stocks also fell sharply on Monday. The Fed’s trend of raising interest rates and shrinking the balance sheet remains unchanged. Everyone has seen that the inflation rate is still at a high point, and then the US stock market also plummeted. The plunge in the US stock market will cause the linkage of the currency circle.