In today's international political arena, the tension between the United States and China is becoming increasingly evident. The latest negative policy attack caused the price of Bitcoin to drop sharply by 10%, and its market value evaporated by as much as $180 billion. This incident not only caused turmoil in the digital currency market, but also highlighted some deep-seated problems in the global economy. Below we will explore the background, impact and possible future direction of this incident in depth.

Negative policy conflict between the United States and China, a digital currency storm

The negative policy attack between the United States and China has become the focus of international public opinion. As a result, the price of Bitcoin, a representative digital currency, plummeted by 10% in a short period of time. This drastic fluctuation caused a strong shock in the market, and digital currency investors also evaporated a lot of wealth overnight. The arrival of this digital currency storm has made people wonder whether the political conflict between the United States and China will continue to have a more profound impact on the global economy.

Bitcoin market value evaporates, digital currency market under pressure

With the evaporation of Bitcoin's market value reaching $180 billion, the digital currency market has fallen into silence and anxiety. Investors are looking for safe havens in the market, and traditional financial markets have also been hit to a certain extent. The future trend of digital currency has attracted much attention, and people have begun to re-examine its status and role in the global economy. The sharp drop in the price of Bitcoin this time has undoubtedly sounded the alarm for the digital currency market and triggered deep thinking and reflection on digital currency investment.

The policy attacks between the United States and China, where will the fate of digital currency go?

The policy attacks between the United States and China are not only a storm in the digital currency market, but also a major change in the global economic landscape. The fate of digital currency will depend on the direction of international politics and the adjustment of policies of various countries. At this time full of uncertainty, the digital currency market needs more stability and transparency, and investors also need to treat market fluctuations rationally and make more wise investment decisions. Only in such an environment can digital currency truly play its role in the global economy and inject new vitality into economic development.

Conclusion:

The negative policy attacks between the United States and China and the event of Bitcoin's market value evaporating by 180 billion US dollars are not only a storm in the digital currency market, but also a major test in the global economy. We need more rational thinking and forward-looking planning to better adapt to changes in international politics and fluctuations in the digital currency market. Only in this context can we better seize opportunities, meet challenges, and achieve sustainable economic development. I hope that the digital currency market will be able to grow through the storms in the future and make greater contributions to the prosperity of the global economy.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

According to previous reports from the currency circle, US President Biden officially signed a $1.2 trillion infrastructure bill on the 15th, which includes strict cryptocurrency tax laws. The bill completed the legislative process and will implement stricter tax regulations for companies involved in cryptocurrency, expand the reporting requirements for brokers, and all digital asset transactions worth more than $10,000 in the future must be reported to the US Internal Revenue Service (IRS).

At the same time, China has taken another heavy hand against cryptocurrency mining activities. Meng Wei, a spokesperson for the National Development and Reform Commission of China, said yesterday that virtual currency mining activities are extremely harmful. The next step will be to focus on industrial centralized mining, state-owned units involved in mining and Bitcoin mining, and carry out comprehensive rectification.

Cryptocurrency market plunges

Affected by the double impact of negative policies from the United States and China, according to Tradingview data, Bitcoin (BTC) fell by more than 10% on the 16th, once falling to $58,574.07, setting a new low since October 28, and then continued to fluctuate. As of press time, Bitcoin was reported at $59,421, a drop of 4.2% in the past 24 hours.

Affected by the sharp drop in Bitcoin, the cryptocurrency market fell across the board. In terms of mainstream currencies, Ethereum (ETH) fell nearly 6%, Binance (BNB) fell nearly 7%, Solana (SOL), Cardano (ADA), Ripple (XRP), Polkadot (DOT), etc. all fell by 5% to 6%.

CoinGecko data shows that in the past 24 hours, the total market value of cryptocurrencies fell by 6.3%, from 2.93 trillion US dollars on the 16th to 2.75 trillion US dollars on the 17th, which is equivalent to a single-day market value of up to 180 billion US dollars evaporated.

Coinglass data shows that due to the impact of large market fluctuations, the total contract liquidation amount of the entire network reached 604 million US dollars in the past 24 hours, and the cumulative number of liquidations exceeded 160,000. The top three currencies in terms of liquidation amount are Bitcoin, Ethereum, and Litecoin, with liquidation amounts of 197 million US dollars, 138 million US dollars, and 23.75 million US dollars respectively.

Impact of the passing of the Infrastructure Act

Some analysts pointed out that the cause of the collapse was related to the completion of the legislation of the U.S. Infrastructure Act. According to Coindesk, Hayden Hughes, CEO of investment platform AlphaImpact, pointed out that the U.S. Infrastructure Act has been signed, leading to a massive sell-off by traders concerned about cryptocurrency regulation and taxation.

Andrew Rossow, an Internet and technology lawyer, told Forbes that the Infrastructure Act requires cryptocurrency brokers to report transactions of more than $10,000 to the tax authorities. Unfortunately, this will lead to increased taxes on digital assets, so the cryptocurrency market may continue to experience price fluctuations, as cryptocurrency service providers may begin to charge higher fees to make up for the increased tax payments.

Excessive leverage creates conditions for collapse

Joe Di Pasquale, CEO of cryptocurrency hedge fund Bit Bull Capital, said that Bitcoin has recently broken through its all-time high. Due to profit-taking factors, there is usually a pullback after the new high. In addition, the U.S. Securities and Exchange Commission (SEC) recently rejected the application for a Bitcoin spot ETF, and a generally over-leveraged market has created market conditions conducive to a decline.

Dylan Le Clair, head of market analysis at Bitcoin Magazine, also mentioned that high leverage is the main reason for the sharp drop in Bitcoin.

Le Clair said: The recent market decline can be largely attributed to the excessive leverage of bulls, and derivatives traders are optimistic about the rise in Bitcoin spot prices and speculate. This can be specifically reflected in the Binance perpetual contract market, which is the most liquid derivatives market in the world, and there is no doubt that the leverage on the long side is too high.

According to Reuters, Defiance ETF Chief Investment Officer Sylvia
Jablonski believes that as Bitcoin falls below the $60,000 mark and below the $62,000 support level, Bitcoin has entered a short-term bear market range.

Sylvia Jablonski said: The next key support level is $58,000. I think someone will buy at this price, and the price of Bitcoin will start to rise driven by demand.