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In terms of U.S. stocks on the 27th, the Dow Jones Industrial Average fell back to close at $31,438, down $62 (0.2%) from the end of last week. The main reason is that the Fed’s monetary tightening policy has accelerated.
According to market observations, the downturn in the crypto asset industry spread on this day, and related stocks fell significantly. Goldman Sachs downgraded its investment decision on crypto industry first stock Coinbase Global from “neutral” to “sell” in a report on the 27th.
On the day, Coinbase stock fell sharply by 11%. ChainDD also mentioned in the previous article that Coinbase announced that it had broken its arm, laying off more than 18% of its employees, and it still needs further layoffs to survive the winter.
Of course, the impact factor is not limited to this one. The Wall Street Journal reported that on the 27th, the cryptocurrency hedge fund Three Arrows Capital was unable to repay Voyager Digital’s current price of about $670 million in debt, including bitcoin, and is filing for bankruptcy. At present, the platform has announced the suspension of user withdrawals and transactions, and has hired lawyers to start bankruptcy proceedings.
The continuous negative news, coupled with the Fed’s continuous interest rate hikes, has gradually revealed that the global economy has been affected by the new crown and war, and institutional investors have also begun to be confused.
There is no doubt that the price trend of cryptocurrencies directly affects the judgment of institutional investors. ChainDD’s market data shows that after the news on the 27th, Bitcoin fell by at least 2.1% from the previous trading day, and it closed down to around $20,000 on the day, at $20,650.
According to ChainDD’s market monitoring, institutional investors have also ushered in the largest round of loss in history. The capital flow of institutional investors to the crypto industry, including derivatives, reached 420 million in the week from June 19th to 26th. Dollar. Although the main reason is that Bitcoin once fell below $20,000 on June 18, a drop of as much as 70% compared with the highest point in November last year, but the overall environment cannot be ignored.
This huge outflow of funds from institutional investors only appeared in 2018 after the incident of currency theft that was completely frozen by Japanese cryptocurrency exchanges. At that time, the global market was affected by the coincheck theft incident, and the trading volume and trading center reversed. But then the market gradually normalized, and the crypto trading market ushered in multiple peaks.
Whether there will be a rebound after this downturn should be what major institutions and individual investors need to pay attention to most. With the acceleration of CBDC projects announced by central banks, whether the traditional encrypted trading market can be seamlessly connected is also the focus of technology developers.
On June 21, the Bank for International Settlements (BIS) released a report on digital currencies, which also poured cold water on the traditional cryptocurrency trading industry. “Crypto assets (virtual currencies) that fluctuate in price are unsuitable as the basis of a monetary system due to structural flaws,” the BIS warned. “The collapse in cryptocurrency prices is a strong sign that the stability of the financial system is at risk,” said Hyun Song Shin, BIS economic advisor and research director.
However, BIS has always held a positive attitude towards CBDC. In October last year, the central banks of the United States, Europe, the United Kingdom, Switzerland, Japan, Canada and Sweden, together with the Bank for International Settlements BIS, issued three reports on the status quo of CBDC, showing that the global CBDC For details, please refer to ChainDD’s exclusive interpretation article: Bank for International Settlements CBDC status report: covering user needs, CBDC design and financial stability .
At the same time, the International Monetary Fund also issued the “Measures for the Management of Capital Flows in the Digital Age” , calling on countries to actively promote CBDC.
ChainDD has monitored that in Asia, especially in Southeast Asian countries, the progress of CBDC projects is remarkable. In mid-June, Vietnam and the Philippines announced the advancement of the issuance process of CBDC. Among them, the Philippines established a CBDC research group as early as 2020, but there has been no technological breakthrough; and Vietnam, according to ChainDD, as early as 2021, the Prime Minister of Vietnam asked the State Bank of Vietnam to pilot CBDC from 2021 to 2023. .
On June 19, Bangladesh’s Finance Minister AHM Mustafa Kamal said that as part of the country’s budget for the 2022-2023 fiscal year, Bangladesh’s central bank plans to conduct a feasibility study on the possibility of introducing a CBDC.
There is also new news in Japan. In June, Bank of Japan President Kuroda Haruhiko said that the layout needs to be accelerated in 2022. For details, please refer to the series of ChainDD reports: [ChainDD Exclusive] The generation gap in Japanese online payment: the main reason for CBDC to hit the wall , is also the blue ocean of the crypto market . Moreover, the Bank of Japan also realizes that private forces will replace the functions of banks in the future. For details, please refer to the previous article of ChainDD: [ChainDD Exclusive] Bank of Japan: The decision-making power of CBDC promotion rests with the citizens, and private settlement companies may replace banks in the future .
Russia, which is deeply mired in the war, also announced that after completing the pilot test this year, the digital ruble will be issued as soon as 2023, and 12 financial and banking giants in Russia have announced their cooperation. This is mainly due to the strong support of Russian President Vladimir Putin. For details, please refer to the previous report of ChainDD: [ChainDD Exclusive] Putin: I want to talk about cryptocurrency, Russia has advantages in developing mining industry . At present, the Russian mining industry ranks third in the world, and the transaction volume is also extremely impressive.
In Europe, the European Central Bank ECB will start its layout in 2021 and is expected to launch in 2026 at the earliest. In the United States, the digital dollar has also been put on the table. ChainDD mentioned in the previous article that the attitude of the Federal Reserve and other institutions has also undergone great changes after the March of Biden’s presidential decree. For details, please refer to ChainDD’s series of reports [ChainDD Exclusive] President Biden The encryption field is listed as a national strategy, and Latin America has also begun the Great Leap Forward and the new vice chairman of the Federal Reserve: maintain the digital dollar to take the initiative and prepare for the future payment pattern .
[This article was originally published on ChainDD, authorized by Titanium Media App, author: Goro Mouri]
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