Many media said that as Bitcoin’s one-month decline turned into a frantic sell-off, this unstable digital currency that once formed a market of over trillion US dollars for a short period of time suffered a sharp drop on the 19th.

According to the US Wall Street Journal website reported on May 19, in the past year, in a speculative boom stimulated by Tesla CEO Elon Musk and other well-known supporters, cryptocurrency prices have skyrocketed.

According to the report, this makes the few but increasing bulls feel that cryptocurrency will inevitably mature and become an important asset class by virtue of its own strength. They concluded that Bitcoin might even realize its original vision and become a legal alternative currency.

However, the momentum that once pushed Bitcoin to rise is now making its price continue to fall. Bitcoin’s trading price at the beginning of 2020 is about 7000 US dollars (1 US dollar is about 6.4 yuan-this net note), but reached the highest value of 64829 US dollars in mid-April this year. Since then, its price has suffered a decline. As of 5 pm Eastern Time on the 19th, it has fallen 41% to 38,390 US dollars, and even fell to 30,202 US dollars earlier in the day.

Rick Erin, investment director of the wealth management company Quilter, said: “Many people are attracted and invest purely because of its rising value. They worry about missing opportunities. Bitcoin is an unstable asset, just like we As often seen in financial markets, there is almost always a depression after a boom.”

According to reports, the sell-off has also expanded to other digital currencies. Data from the cryptocurrency market capitalization website shows that since the morning of the 18th, the total value of the cryptocurrency market has fallen by more than 470 billion U.S. dollars to approximately 1.66 trillion U.S. dollars. Bitcoin’s share has fallen to $721 billion.

In addition, according to a Reuters New York/London report on May 19, Bitcoin, which was still ignoring the heavy pressure a few weeks ago, returned to reality after experiencing a wave of rollercoaster-like shocks on the 19th, which may weaken its ability to become a mainstream investment product. potential.

According to reports, on the 19th, the market value of the entire currency circle shrank by nearly $1 trillion.

The report pointed out that US Federal Reserve Board officials downplayed the risks that cryptocurrencies pose to the wider financial system. “For its part, I currently don’t think this is a systemic problem,” said Brad, president of the Federal Reserve Bank of St. Louis. “We all know that cryptocurrencies are very volatile.”

In addition, the British “Guardian” website reported on May 19 that on the 19th, the price of Bitcoin, the world’s largest digital currency, fell nearly 30% in a day of chaotic transactions.

According to the report, for months, critics have been predicting that Bitcoin will be sold off, claiming that it has no intrinsic value. Andrew Bailey, the governor of the Bank of England, even warned that investors should be prepared to lose all their funds if they are involved in cryptocurrencies. At the same time, the European Central Bank compared the skyrocketing Bitcoin to other financial bubbles, such as the “tulip mania” and the “South China Sea bubble” that eventually burst in the 17th and 18th centuries.

Steen Jacobson, chief investment officer of Saxo Bank of Denmark, said that the latest round of selling appears to be “more serious” than the previous one. He said: “A new round of extensive deleveraging has stirred up the entire cryptocurrency market.”

On May 19, the price of Bitcoin was displayed on a cryptocurrency ATM in a store in Union City, New Jersey, USA. (Reuters)

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