Gray December For Crypto Investors.
Bitcoin is down 30% from its all-time high of around $69K. Hmm, what else is there? In this article, we will discuss why Bitcoin Crash this December.?
This is just the beginning.
If the mountain erupts, it hasn't erupted yet, guys. Just minor earthquakes. You've heard of crypto Winter, because the issue is now growing again. So what made Bitcoin crash this time ..?
The first is a bitmart hack.
This is a nightmare for the Bitmart exchange and for all Bitmart users of course. I personally am not sure if the funds at Bitmart are insured. Because I'm trying to find here and there, I still can't get any info if the funds are insured or not. If you have info about Bitmart and its insurance, you can fill it in the comments column. Yes. Because I didn't find it.
Indeed, if this insurance is not a common practice in crypto exchanges, exchangers usually have various ways. Have their own way. For example, Binance has SAFU or Secure Asset Fund for Users in a cold wallet.
Huobi has 20 thousand Bitcoins in its emergency fund, as well as crypto.com which has insurance, the important thing is that there is a scenario, if an Exchange is hacked the total loss of Bitmart reaches 196 million dollars. It's really bad luck for this bitmart. In fact, not long ago, it just received series-b funding and was valued at 300 million US Dollars.
For this reason, the crypto problem that the hacker took away was already mixed in Tornado cash, so it was difficult to track where it was running. To be sure, the crypto assets that are taken away are also ready to be dumped by hackers to cash out at any time.
This is what makes the market a dilemma and institutional investors are starting to get nervous again. The crypto assets that were taken away included shiba, Saitama Inu, ilon, CRO, MATIC, BNB, to MANA and many more. Bitmart itself promises to fully compensate its users. Friends, have you become a victim of Bitmart? Friends, fill in the comments column Yes.
If Bitmart shuts down or goes bankrupt, I think the impact will be much scarier than the news of Bitcoin being banned in China than tappering or other crises. Because the threat is very real. Crypto, the basis and fundamentals are the same as currency. That is trust and Trust. Trust and trust are reduced, the value of assets will also decrease.
If Bitmart goes bankrupt, investor confidence in crypto or exchangers will certainly decrease drastically, for that in the near future not only Bitmart will be hacked, but also BadgerDAO. His assets were taken away by 120 million US Dollars by hackers and he said Celsius became the biggest victim of the BadgerDAO hack. The losses experienced by Celsius reached around 50 million US Dollars, this is also an important lesson for us to always choose a safe exchange.
The second, Evergrande failed to pay.
This time it was true that you failed to pay guys and the problem became the Domino effect for real estate companies in China. Where the Chinese real estate market is 55 trillion dollars, 2 times larger than America's and 4 times larger than China's own GDP.
What does that have to do with the market?
What is feared is that there will be a Domino effect from the bankruptcy and failure of Chinese companies, whose debt securities are also held by institutional investors in other countries, especially western countries.
This time it was not only Evergrande, but also Kaisa, a real estate developer in China who also failed to pay. If it has to do with crypto, there is no direct relationship, but that was it. Institutional investors are concerned about collapsing because they hold bonds from real estate companies in China.
Therefore, what makes Bitcoin or other crypto crash, the third most likely is due to an energy crisis.
Stay in China and maybe this doesn't have a direct relationship with Crypto or Bitcoin, but more or less this makes Flow or factory protection chains around the world shattered. In fact, many factories in China are only operational 2-3 days a week and have to use generators.
Why did the energy crisis occur in China in the first place?
Initially China wanted to achieve its target of becoming a carbon-free country by 2060. Finally, their president banned or possibly restricted domestic coal mining activities. As a result, power plants cannot supply energy and there is an energy crisis.
They can indeed import, but with the pandemic, the supply of coal to them is also reduced. The latest news is that China has received supplies from Russia, but it is still not sufficient for its needs. If the production of factories around the world is disrupted because of the energy crisis in China, this will automatically disrupt the market as a whole. Not only crypto but also stocks, bonds and others.
My fourth analysis ish Bitcoin reserves on the All Time Low exchange. What does it mean? It means that whales hold Bitcoin for the time being and are ready to dumb anytime. As you can see in the chart so far, the amount of Bitcoin reserves on the exchange is on the blue line. If the blue line starts to rise, it means that the whale has sold its Bitcoin and the effect is that the price of Bitcoin will fall until it forms a pattern as usual. Reserve bitcoin on the exchange a lot more, Whale buy again, price goes up again. This graph is our reference to how far the crash of marketcrypto is now.
The fifth is the Federal Reserve warning.
Yes, this one is just adding fud. But this is very unique, because this is the first FED warning about crypto. The FED says investors should exercise caution when investing in Bitcoin, ethereum, ripple or solana. This warning is a written warning but only one sentence out of 75 pages of the report. Retail investors like us may respond normally, but institutional investors or whales with large funds may react differently.
The sixth is the Omicron case.
Which is not directly related, but psychologically big traders or institutional traders always follow the same pattern. Until finally they followed each other and made the price of Bitcoin and other Crypto Assets go down. But I think the crash is because of omicron. Yes, this is only temporary, only short term.
The seventh is tapering.
Yes, the shadow of tapering still looms over the crypto market and Bitcoin in particular. In simple terms, don't be too afraid of tapering or other negative issues, when there is a crash, we party. Don't run, hide and be afraid, this is the magic in the crypto world. We can buy our favorite crypto assets at discount prices.
How many times have we experienced Crash in 2021? But overall Bitcoin is still up more than 150 percent. But apart from that, there is also good news, including a visa that has set up a consulting division for institutional investors who want to know more about crypto.
There is also El Salvador who is going crazy to make Bitcoin City. This is fantasy, fantasy, or can it really be realized and there is also a Bitcoin spot ETF. This is the most awaited, Grayscale himself has written to the secretary of the SEC that it is strange that the Bitcoin futures ETF has been approved but the Bitcoin Spot ETF has not been approved.
Greyscale said, there is no basis for investments in derivatives markets to be accepted but investments in the assets themselves are not accepted and Greyscale itself estimates that the bitcoin spot ETF will be launched in July 2022. However, this Bitcoin Spot ETF already exists in Canada, Australia, and Europe.
Another good news is that Meta is launching the Defi crypto wallet which integrates with WhatsApp. What is the solution for that? I am a long term investor. I'm not too worried. Overall, marketcrypto will be a little bumpy. Especially in the early to mid-2022.
Instead we have to get ready for the party. By the way, Michael Saylor has already bought In The Deep and I'm already prepared if, for example, there is a big crash.
My first preparation, I prepared USDT and can be parked on a platform that pays a high interest rate first.
My second preparation, I also started to collect my Crypto assets into one, so that later they can be used as collateral when there is a Crash. Precisely when there is a crash, I can buy crypto at a low price without having to cut loss. I can buy with borrowed money from the collateral of my crypto assets.
Hopefully my writing on this occasion is useful for all of us.
