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The "routines" in the cryptocurrency circle are far more than just tricking retail investors into "buying coins" through forums. There are also "staff" in the cryptocurrency circle who specialize in tricking retail investors into "mining".
The myth of huge profits in the cryptocurrency circle has attracted waves of post-95s to join the game. They firmly believe that the cost investment of tens of thousands of yuan can be at least 10 times higher. Some people insist on watching the market for 1-2 hours every night under the temptation of huge profits, but more people have paid a lot of tuition fees.
Recently, the Beijing Local Financial Supervision and Administration Bureau and the Business Management Department of the People's Bank of China jointly issued a risk warning on preventing virtual currency trading activities. The "risk warning" solemnly warns relevant institutions within the jurisdiction that they shall not provide business premises, commercial displays, marketing and publicity, paid traffic diversion and other services for virtual currency-related business activities, and financial institutions and payment institutions within the jurisdiction shall not directly or indirectly provide virtual currency-related services to customers.
Affected by the news, the price of Bitcoin plummeted, from the highest point of $65,000 to around $33,000. As of July 19, its price was still hovering around $31,000. The reporter noted that in June, the central bank interviewed some banks and payment institutions on the issue of banks and payment institutions providing related services for virtual currency trading speculation, indicating its determination to prevent individual risks from being transmitted to the social field. Not only Bitcoin plummeted, but all kinds of virtual currencies also experienced a 10%-40% drop.
However, there are still post-95s players who "spoke out" on public network platforms after seeing the sharp drop in virtual currency, "If it falls below $10,000 (US dollars), I will sell my house and join the game." Xia Jie, a college student in Xi'an, has been involved in the cryptocurrency circle for nearly three years since he entered it in early 2018. His personal Weibo and Moments have been filled with content related to virtual currencies for nearly a year.
On April 6, he wrote in his WeChat Moments: "As a college student, my main job is to make money. I hold tens of thousands of Onts and wait for news reports that a college student in Xi'an has made millions of yuan. Don't doubt it, that's me." The full name of Ont is Ontology coin, a public chain token. Xia Jie firmly believed at that time that the Ont coins he held could at least increase tenfold. He claimed that before the overall decline in the price of virtual currencies, his "peak" had once reached one million yuan.
He even believes that "cryptocurrency speculation is much easier than stock speculation". "There are very few people who can make 3 times or 5 times their money in a year in the stock market. But in the cryptocurrency world, everyone shares the ups and downs, and the market opportunities are endless. Real estate and stock speculation is no longer suitable for ordinary young people."
Hu Jie, professor of practice at the Shanghai Advanced Institute of Finance and member of the Blockchain Committee of the China Computer Society (CCF), disagrees with this. He told reporters that the "risk" in the financial field is generally measured by the fluctuation of the price of the underlying asset. "From the perspective of fluctuation, the risk of virtual currency is much higher than that of stocks." He cited the price of Bitcoin as an example. The currency rose from about $3,000 before the epidemic to $60,000 at the beginning of this year, and recently fell to about $31,000. "Compared with this, it is rare for stocks to have such a big change in a short period of time." Watching the market intensively every day, being tricked by people with ulterior motives
Unlike Xia Jie, more people born after 1995 clearly feel that the cryptocurrency world is full of tricks after getting in touch with it.
Wang Shi from Chongqing followed the trend and entered the cryptocurrency circle in March this year. He followed his friends to invest 1,000 yuan on a cryptocurrency trading app and earned more than 700 yuan in two days. He continued to increase his position. Wang Shi told reporters that he prefers to play short-term: he places an order at a low point in the middle of the night, and considers whether to sell or buy based on the data after getting up in the daytime. This requires him to watch the market for 1-2 hours every day. In more than a month, Wang Shi finally made a profit of several thousand yuan.
Chen Li, who was preparing for his postgraduate entrance exam, followed Wang Shi to speculate in cryptocurrencies. However, he did not have time to watch the market, and after buying 4,300 yuan of Ethereum coins, he lost 2,400 yuan in less than half a month.
Wang Shi and Chen Li finally decided not to "speculate in cryptocurrencies". Wang Shi told reporters that he followed various players in the crypto community forum, where various so-called "cryptocurrency bigwigs" often showed their daily "performance". Many people could earn up to 100,000 yuan overnight, but more "small players" lost everything. "Their 'various forms' in the group are quite ironic." Based on his observation of the "cryptocurrency circle", he believes that "at least 90% of people have lost money."
Yang Jing, an undergraduate student majoring in finance, is also quietly observing the cryptocurrency circle. She found that the cryptocurrency circle is more like a "palace fight field" full of scheming and calculations, "a game between people. Those big names who claim to have made a lot of money may not make money by speculating in cryptocurrencies, but by tricking you."
On the evening of May 18 this year, the China Internet Finance Association, the China Banking Association, and the China Payment and Clearing Association jointly issued the "Notice on Preventing the Risk of Virtual Currency Trading Speculation". On the same day, the Inner Mongolia Development and Reform Commission issued the "Notice on the Establishment of a Reporting Platform for Virtual Currency "Mining" Enterprises".
The following day became a big day for the cryptocurrency world. On May 19, Bitcoin fell below the $40,000 mark, a 24-hour drop of nearly 25%; Ethereum plummeted by nearly 39%; Shiba Inu Coin fell by 53.73%; and Dogecoin fell by 46.93% in 24 hours.
Yang Jing told reporters that she had actually smelled danger signals in various cryptocurrency forums before May 19. "All platforms were caught up in a frenzy, and some people with ulterior motives continued to promote the high returns of cryptocurrencies, causing many retail investors who did not understand cryptocurrencies to flood into the market. This atmosphere was too problematic, so I quickly withdrew." She told reporters that in the end, the group of people who mindlessly entered the "created" hot market became "leeks."
Experts warn: The cryptocurrency industry lacks regulation, is high risk, and rights protection is difficult. Reporters have noticed that the "routines" in the cryptocurrency industry are far more than just tricking retail investors into "buying coins" through forums. There are also "staff" in the cryptocurrency industry who specialize in tricking retail investors into "mining."
On June 25, Axin, who has a large number of fans and runs his own "mining" community, "recommended" his friends in the circle of friends: "Really, mining is really super cost-effective now!"
On June 18, due to the excessive energy consumption caused by intensive Bitcoin mining, many provinces in my country announced a large-scale withdrawal of mining projects. A series of virtual currency mining industry policies have been intensively introduced, and major mining provinces such as Inner Mongolia and Sichuan have responded. Virtual currency miners and mine owners have faced the difficult situation of "no electricity to mine". But Axin is still frantically "recommending" mining benefits to his fans, "When you invest in Bitcoin, it is equivalent to using money to buy coins. After you have a mining machine, you are equivalent to a miner. The machine will mine Bitcoin for you every day. After mining, you can store it and look for the right opportunity to sell it."
Axin told the reporter that he majored in railways in college and entered the "cryptocurrency circle" after graduation through the introduction of a relative. This post-95s claimed to have handled "countless transactions" and even showed the reporter a screenshot of his account losing more than 10 million yuan on May 19. On a social platform where he talked about his experience in cryptocurrency trading, a video he posted had 28,000 views, 304 comments, and 222 likes. The title of the video was "Half Year After a Fresh Graduate Bought 100,000 Bitcoins". At the end of the video, he said, "Digital currency will be an investment trend in the future, and I am very optimistic about digital currency."
In an interview with the media, Zheng Lei, chief economist of Baoxing Financial, pointed out that the speculation of virtual currency far exceeds that of other financial currency market products. "Irrational speculation has led to repeated liquidation of long and short positions. As an alternative investment target, the risks it causes are more complex and diverse than those of traditional financial instruments."
However, "UP hosts" like Axin are still using their simple and crude "Amway" methods to "trick" groups of young people who are eager to get rich overnight.
Hu Jie told reporters that at present, my country has not issued strict regulations prohibiting individuals from holding, buying and selling virtual currencies, but does not allow institutions or individuals to provide services for public transactions of virtual currencies. "It cannot be turned into a business, providing a platform for buying and selling speculation." Therefore, young people active in the "currency circle" not only have to deal with the high risk of price fluctuations of virtual currencies themselves, but also have to bear the uncertainty risks brought by the cryptocurrency speculation platform itself. "Some platforms are unreliable, registered overseas, and unregulated. Some suddenly ran away, and some were hacked. Where can domestic citizens go to protect their rights?"
Hu Jie reminded young people in the "cryptocurrency circle" that when "hyping" an object, one must first see whether the object itself has value. "If I give you a piece of waste paper and sell it to you for 100 yuan, do you think it is worth it? Whoever gets this piece of waste paper may lose it because it has no value in itself." Second, it depends on whether the value of the object is consistent with the price. "A listed company has some value, but even so, its value and price may be inverted. But what is the value of virtual currency?"
He believes that ordinary college students are almost unable to bear the losses brought about by cryptocurrency speculation. "Some people see others making money from cryptocurrency speculation, so they use their living expenses to speculate. Once many students do this, they will suffer losses, which will cause social problems." He suggested that students stay away from such high-risk speculation activities as much as possible.
In fact, strict regulation of the virtual currency market has become a global consensus. The U.S. Treasury Department said on May 20 that it would take stricter regulatory measures on the cryptocurrency market and related transactions to prevent illegal activities such as tax evasion; the Hong Kong Special Administrative Region Government of China also recently proposed compliance supervision of virtual asset service providers in combating money laundering and terrorist financing; South Korea confiscated virtual currency assets worth more than 53 billion won from 12,000 domestic tax evaders; the British financial regulator ordered the virtual currency exchange "Binance" to stop regulated activities in the country, etc. (China Youth Daily) |
