Bitcoin plunges nearly 70%: the third heavy blow in history

Bitcoin, the virtual currency once known as "digital gold", has recently attracted widespread attention from global investors again. According to the latest data, Bitcoin's decline has been close to 70%, ranking third in its history. This phenomenon not only reflects the volatility of the Bitcoin market, but also reveals the deeper economic and financial factors behind it. This article will analyze the reasons, impacts and possible future development trends of Bitcoin from multiple dimensions, and strive to present readers with a detailed picture of the digital currency market.

As we all know, Bitcoin's price volatility is extremely large and is affected by many factors, including market supply and demand, policies and regulations, and technological development. In addition to changes in market sentiment, this plunge was driven by a series of external factors. For example, global economic uncertainty has intensified, inflationary pressure has risen, and investors' risk aversion to risky assets has intensified. Against this backdrop, Bitcoin, as a high-risk investment, is inevitably implicated.

In the past few years, the price of Bitcoin has repeatedly hit new highs, especially in 2021, when the price once exceeded $60,000. However, as the market continues to mature, investors' views on Bitcoin have also begun to gradually change. Many people have begun to realize that Bitcoin is not an unchanging "wealth preservation tool", but full of speculation. In fact, investors' psychological expectations are an important reason for Bitcoin price fluctuations. This plunge is obviously a direct result of the change in market sentiment.

From a technical perspective, Bitcoin's network performance and transaction efficiency also affect its price performance to a certain extent. Although Bitcoin's blockchain technology is innovative, it still faces speed and cost limitations when processing transactions. As more and more users pour in, the congestion of the Bitcoin network has gradually increased, causing transaction fees to soar. This situation not only makes investors dissatisfied, but also makes some potential users doubt the use of Bitcoin, thus affecting demand.

At the same time, the strengthening of policy supervision is also an important factor leading to the plunge of Bitcoin. In recent years, countries around the world have gradually tightened their regulatory policies on cryptocurrencies, especially in China, where the government has issued bans on Bitcoin mining and trading many times. The introduction of these policies has undoubtedly brought great pressure to the market and hit investor confidence. In this case, many investors choose to sell their Bitcoin, further exacerbating the price drop.

It is worth noting that the plunge of Bitcoin is not just an isolated incident, it reflects the current situation of the entire cryptocurrency market. Many other cryptocurrencies were also hit hard by this volatility, with the total market value shrinking by more than $500 billion. This phenomenon makes people wonder whether the bubble of cryptocurrency is bursting or the market is undergoing a necessary reshuffle.

When analyzing the reasons for the plunge in Bitcoin, we also need to pay attention to the behavioral patterns of investors. In recent years, with the popularity of social media, many retail investors have obtained information through online platforms and participated in Bitcoin investment. Although this phenomenon has promoted the popularity of Bitcoin to a certain extent, it has also led to irrational prosperity in the market. Many investors lack sufficient market knowledge and risk awareness, blindly follow the trend, and ultimately lead to drastic price fluctuations.

As the investor structure of Bitcoin becomes increasingly diversified, the volatility of the market has also increased. The participation of institutional investors has undoubtedly injected more funds into the Bitcoin market, but it has also brought greater risks. Institutional investors tend to adopt more aggressive investment strategies. They are more sensitive to market sentiment and may quickly withdraw their funds once negative news appears, thereby exacerbating market volatility.

However, investors also need to remain rational when facing Bitcoin. Market volatility certainly brings opportunities, but it also hides risks. For ordinary investors, it is recommended that when investing in Bitcoin, they must do a good job of risk control and reasonably allocate assets to avoid unnecessary losses due to blindly following the trend.

In this ever-changing cryptocurrency market, investors need to stay alert and pay attention to market trends. Whether it is the price fluctuation of Bitcoin or the changes in the policy environment, it will directly affect investors' decisions. In the end, only those investors who can analyze rationally and adapt flexibly can remain invincible in this wave of digital currency.

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.

Bitcoin once surged to $18,674 in December 2017, and has now fallen by nearly 70%, ranking third in history. [TechWeb Report] On February 6, according to Reuters, Bitcoin fell more than 15% on Monday, falling to a nearly three-month low due to concerns about global regulatory restrictions and the ban on credit card purchases of Bitcoin by banks in the UK and the United States.

In Luxembourg, Bitcoin fell to a low of $6,853.53 in afternoon trading in New York. Compared with the peak of nearly $20,000 reached in December last year, the price of Bitcoin has fallen by more than half.

As more and more governments and banks signal regulatory crackdowns, Bitcoin, which soared more than 1,300 percentage points last year, has depreciated by about half so far in 2018. Last week, Bitcoin suffered its worst week since 2013.

"We expect this downward trend to continue and we set the next price level at $5,000 per coin," said Miles Eakers, chief market analyst at Centtrip, which specializes in foreign exchange, global payments and money management. Other cryptocurrencies also saw double-digit declines on Monday, according to industry tracking website Coinmarketcap. Ethereum, the second-largest virtual currency, fell nearly 19% to $703.40, while the third-largest virtual currency, Ripple, last traded at 71 cents, down 14.1%. Lloyds Banking Group said on Sunday it would ban customers from using credit cards to buy bitcoin. JPMorgan Chase and Citigroup also announced similar bans. India said on Monday it planned to take steps to regulate the trading of cryptocurrency assets. "Cryptocurrencies have fallen significantly out of favor since mid-December, exacerbated by a steady stream of negative headlines and speculation about increased regulation," said Craig Erlam, an analyst at currency broker Oanda.

The cryptocurrency space has also attracted attention following news of hacks and scams, including the theft of 58 billion yen ($532.9 million) worth of digital currency from Tokyo-based Coincheck two weeks ago. But some investors are not worried.

Jay Clayton, chairman of the U.S. Securities and Exchange Commission, said investors should be cautious about investing in cryptocurrencies as he outlined the commission's efforts so far.

After experiencing this decline, investors can't help but begin to reflect: Where is the future of Bitcoin? Although the market outlook is still unclear, we can find clues from some data and trends. First, despite the heavy losses in Bitcoin prices, its basic properties as a digital currency have not changed. Bitcoin still has the characteristics of decentralization and immutability, which makes it a potential value storage tool to a certain extent.

Secondly, the continuous advancement of technology has also brought new opportunities for the development of Bitcoin. With the emergence of Layer 2 solutions, Bitcoin's transaction speed and efficiency are expected to be improved, thereby improving user experience and attracting more users to participate. In addition, as the global acceptance of digital currencies gradually increases, more and more merchants are beginning to accept Bitcoin payments, which also lays the foundation for its future popularity.

Looking back at history, every plunge in Bitcoin has been accompanied by market reflection and rebirth. Although the decline this time has been close to 70%, we cannot ignore that the essence of the market lies in the dynamic changes in supply and demand. Only through continuous learning and adaptation can investors better grasp the pulse of the market and respond to future challenges and opportunities.