Bitcoin plummeted, and it was not only Musk who was "injured"!

In the context of the Fed raising interest rates, can the once "brave" virtual currency withstand the pressure? Whenever the price of Bitcoin rises or falls sharply, it will always remind people of those supporters of virtual currencies, and the situation of some investment bigwigs has attracted more attention.

At the mercy of the Fed?

Recently, the price of Bitcoin has continued to be under pressure. On the 14th, Bitcoin fell below the $21,000 mark, and the lowest fell to $20,950, the lowest level since December 2020. Bitcoin has never been below $20,000 since December 2020. Compared to its all-time high of $67,800 in November 2021, its price has fallen by nearly 68%. On June 15, the price of Bitcoin fell again. As of 17:00 Beijing time, the latest price of Bitcoin was $20,198, with an intraday drop of more than 9%. If you buy a bitcoin at the high point, the floating loss so far may be as high as $47,000. Statistics from CoinMarketCap show that the total market value of global virtual currencies has fallen below $1 trillion this week.

In the past, the price of bitcoin has climbed against the backdrop of fiscal and monetary stimulus around the world. Proponents of Bitcoin, on the other hand, see it as a safe haven, a bit like gold, against the backdrop of a weakening dollar and rising inflation risks. However, traders increased bets on more aggressive rate hikes by the Federal Reserve after the latest data showed U.S. inflation jumped to a nearly 40-year high in May. Many major banks and investment banks such as JPMorgan Chase and Wells Fargo generally predict that the Federal Reserve may announce a 75 basis point interest rate hike to curb inflation from rising again, and overseas stock markets have also experienced violent shocks. Virtual currencies have been particularly severely suppressed in the Fed's policy. In addition to inflationary pressures, the regulatory pressure on virtual currencies by the U.S. government has continued. U.S. Treasury Secretary Janet Yellen has said virtual currencies are very risky investments for most retirement savers.

Antoni Trenchev, the co-founder of virtual currency lender Nexo, said virtual currencies are still at the mercy of the Federal Reserve and maintain a close relationship with the Nasdaq and other risky assets. In addition, the virtual currency lending platform Celsius Network suddenly announced on Sunday local time that it would suspend the withdrawal, exchange and transfer services of all customers, causing market concerns. Some industry insiders believe that the Celsius Network incident may be the first series of consequences of the collapse of stable coins TerraUSD and Luna tokens. In addition, Google Trends data also appears to show that fewer people are searching for bitcoin this year than a few years ago, reflecting bitcoin’s waning popularity.