The virtual currency market collapsed on 5.19, and the market value evaporated on a large scale. The decline of many mainstream currencies hit a new high in recent days. All major comprehensive and financial media have published relevant reports on this bloodbath in the currency circle. This article selects articles from well-known foreign media such as the BBC, Wall Street Journal, and Bloomberg to present readers with interpretations of overseas markets.

BBC

According to the BBC report, there are two main reasons why the price of Bitcoin fell to $34,000. First of all, the China Internet Finance Association, China Banking Association, and China Payment and Clearing Association jointly issued the "Announcement on Preventing Hype Risks in Virtual Currency Transactions", requiring financial institutions and payment institutions not to conduct business related to virtual currencies, and expressing that the price of cryptocurrency Vigorous fluctuations will seriously affect people's property safety. Second, Tesla announced in March that it supports customers buying cars with Bitcoin. But last week, Musk’s attitude took a big turn, saying that due to environmental factors, Tesla no longer accepts bitcoin payments. As soon as the news came out, the price of bitcoin fell by more than 10%.

(Original link: https://www.bbc.com/news/business-57169726)

Bloomberg

The Bloomberg report also mentioned Tesla's behavior and the announcement of the three associations, which together caused Bitcoin's plunge yesterday. However, the report also pointed out that the decline of Bitcoin cannot be completely attributed to the above two reasons. In addition, leveraged players and volatility may also have contributed to this turmoil. The article states that over 700,000 traders’ accounts were liquidated in the past 24 hours. Todd Moraki, co-founder of JST, said that bad news, bearish indicators and forced selling are the root of this disaster.

(Original link: https://www.bloomberg.com/news/articles/2021-05-20/crypto-recipe-for-disaster-keeps-bitcoin-ether-under-pressure)

CNBC

In related reports, CNBC hinted that the decline of Bitcoin this time is due to the following points: China prohibits financial institutions from providing services related to cryptocurrency transactions; JPMorgan Chase’s report shows that large institutional investors are selling Bitcoin and turning to gold; , Musk’s change in attitude towards cryptocurrencies has also exacerbated this month’s correction in bitcoin prices.

(Original link: https://www.cnbc.com/2021/05/19/tesla-coinbase-lead-drop-in-crypto-related-stocks-as-bitcoin-plunges.html?&qsearchterm=Bitcoin)

CNN

The CNN report clearly pointed out that China has further cracked down on cryptocurrencies, triggering a plunge in cryptocurrency prices and spreading panic in the market. In addition, the article also mentioned Tesla, saying that after the news that Musk stopped accepting bitcoin payments due to environmental reasons, bitcoin began to fall. The statement of the China Three Associations shocked the entire encryption market. The article also details the Chinese government's stance on cryptocurrencies in recent years.

(Original link: https://edition.cnn.com/2021/05/19/investing/bitcoin-price-drop-china-crypto-intl-hnk/index.html)

Forbes

Forbes mentioned three reasons in the background statement of the decline in cryptocurrencies. In addition to the Chinese government's position and Tesla, two factors repeatedly mentioned by various media, Forbes also mentioned the attitude of the US SEC. SEC Chairman Garry Gensler stated in early April that the US lacks a regulatory framework for encrypted exchanges. In late April, the Biden administration created a regulatory framework for the cryptocurrency market.

(Original link: https://www.forbes.com/sites/palashghosh/2021/05/19/amid-sell-off-and-extreme-volatility-investors-should-be-wary-about-cryptocurrencies-ubs- warns/?sh=3ba77d35ff17)

The Times of India

In addition, the "Times of India" also pointed out that the Chinese central bank reiterated that digital tokens cannot be used for payment, which also exacerbated the sell-off of Bitcoin.

Financial Times

According to the "Financial Times" report, the cliff-like decline in the cryptocurrency market is not unrelated to the strengthening of supervision by the Chinese government. The People's Bank of China has just issued a ban requiring financial institutions not to accept cryptocurrency payments or provide related products and services. The recent turmoil in the encryption market has intensified, and major mainstream currencies have continued to fall. At this time, the Chinese government's ban will undoubtedly make the market that is already in panic worse.

The People's Bank of China stated in the announcement that virtual currency "is not a real currency, and should not and cannot be used as currency in circulation in the market." Some professionals have analyzed that China's crackdown on the encryption field is based on three considerations: 1. The central bank is preparing its own 2. The current policy is not in place to control the outflow of funds; 3. Ensure that people will not fall into scams.

In a recent "Financial Stability Report", the European Central Bank pointed out that the volatility of bitcoin prices makes it full of risks. Its recent skyrocketing is even worse than the tulip boom and the South Sea bubble incident in the 17th and 18th centuries. In contrast, U.S. authorities have been more open to crypto assets, with the Coinbase exchange just listing on Nasdaq and large financial institutions such as Goldman Sachs and JPMorgan Chase exploring offering digital currencies. Asset Management Services.

Henri Arslanian, global cryptocurrency leader at PricewaterhouseCoopers (PwC), said: "I think regulators in other countries will soon adopt the same control policies (as in China) to alert investors to the volatility and speculative risks in the encryption market."

(Original link: https://www.ft.com/content/c4c29bb3-c8ee-454c-a2dd-eac9f644007f)

The Wall Street Journal

When the Wall Street Journal analyzed the strong growth momentum of cryptocurrencies in the past year, it believed that such huge speculative gains in the entire market benefited from the support of various celebrities, including Tesla ECO Elon Musk, billionaire Paul Tudor Jones and Rapper Snoop Dogg. It was the continuous entry of this person that made the growing investment group in the currency circle see the dawn of the bull market. They changed the views of early investors on Bitcoin, so people began to believe that it might really become a legitimate payment method.

Yet the momentum that fueled the market exuberance is now turning into stress. Many novices only saw the growth curve of Bitcoin and then followed suit. They did not realize that the market may face a collapse after the boom. Some investors were worried about monetary policy so that they could not be optimistic about the inflow of funds in the market for a long time, so they panicked Sentiment is spreading across the crypto space. Now the policy restrictions of the Chinese authorities have exacerbated investors' concerns, and at the same time proved that the encryption field is still very sensitive to regulatory policies.

The sharp decline in the market this time is similar to the trend in 2017. When Bitcoin reached its peak 4 years ago, it coincided with the opening of Bitcoin futures services on the Chicago Mercantile Exchange. People thought this was a signal of a new round of rise, but it was the beginning of a crash. Bitcoin ushered in a new record high in April this year, and Coinbase was also listed on Nasdaq. That's exactly what happened back then, which may mark another time we've sent off the bull market.

Nikolaos Panigirtzoglou, an analyst at JPMorgan Chase & Co., took a different view in response to the view that some analysts attributed the bull market to institutional investors. Data show that the market value of Bitcoin increased by US$800 billion from September last year to February this year. However, this amount of money is not huge. In contrast, the retail investors it drives have injected greater impetus into the market. In addition, since January this year, the inflow of institutional funds began to gradually decrease, and in May, the flow direction changed to outflow for the first time. This also shows that institutions are quietly leaving the market and returning their investment focus to traditional assets.

(Original link: https://www.wsj.com/articles/bitcoin-and-dogecoin-prices-tumble-as-investors-sour-on-cryptos-11621435489)

Reuters

"Reuters" wrote in a report that the announcement of the China Financial Industry Association was the direct catalyst for the market decline. Although China has repeatedly introduced restrictions on cryptocurrencies, this announcement is a step up in terms of strength and scope. In addition, the encryption market has been under pressure since Tesla CEO Musk announced the suspension of accepting bitcoin payments a week before the People's Bank of China's announcement.

An executive at Pepperstone said that the rebound trend of the market is not yet clear, and it is impossible to determine whether there is support. Perhaps there will be more severe shocks when the Asian market integrates into the global environment.

Since many institutions and retail investors believe that cryptocurrencies represented by Bitcoin will be accepted by mainstream society, encrypted assets will continue to rise in 2021. However, with the soaring curve, the fluctuation of currency prices has never stopped. Bitcoin has increased by 27% this year, and this week's single-day swing is close to 300%.

(Original link: https://www.reuters.com/technology/bitcoin-struggles-footing-worries-over-china-leverage-2021-05-20/)