Trump took action! Bitcoin's market value evaporated by 200 billion in an instant, and more than 20,000 investors went bankrupt

On November 26, the price of Bitcoin plummeted from its highs, falling below $17,000 during the trading session. As of press time, according to the quotes from Bitcoin news resource website Coindesk, the price of Bitcoin was about $16,580, a 24-hour drop of 12.96% , and the Bitcoin transaction volume in 24 hours was $37.53 billion.

According to the market statistics report of Hetongdi, the total liquidation of Bitcoin in the entire network in the past hour was US$204 million, and the total liquidation of Bitcoin in the entire network in 24 hours was US$703 million, with 22,269 people having their positions liquidated.

In the 24 hours up to press time, Bitcoin experienced ups and downs, reaching a high of $19,474.87 and a low of $16,514.51, a difference of nearly $3,000. Previously, the total market value of Bitcoin once exceeded 2.2 trillion, surpassing the total market value of A-share Moutai, but it was unexpected that more than 200 billion of the market value evaporated in one day.

Trump's move: Tracking every market participant

Late Wednesday, Coinbase CEO Brian Armstrong slammed a rumored U.S. Treasury Department plan to try to track the owners of cryptocurrency wallets and everyone involved in a transaction.

The plan, which is rumored to be executed by outgoing Treasury Secretary Mnuchin, would, if implemented, suppress a core principle of the cryptocurrency ethos — that private cryptocurrencies are free from harassment and tracking.

Specifically, the proposed regulation would require financial institutions like Coinbase to verify the owner of a cryptocurrency wallet and collect their identity information before sending digital currency to that cryptocurrency wallet. In addition, this data would also be logged.

If this policy is implemented, it will have a far-reaching impact on the entire cryptocurrency industry.

The policy will not only affect people who store digital currencies on hardware devices such as Trezor or Ledger. For other crypto services, using non-custodial wallets, decentralized finance (DeFi) smart contract software wallets, etc., they all need to prove their identity under the rules and conduct transactions under supervision.

Such policies are not without precedent around the world, with the Financial Action Task Force on Money Laundering, like the FATF guidelines, already being implemented in Switzerland and the Netherlands, where virtual asset service providers (VASPs) must prove ownership of non-custodial crypto wallets before transactions can take place.

Armstrong said that such a policy would be a very terrible political legacy of the Trump administration and would have a negative impact on the United States in the long run. And the additional transaction friction would kill many emerging encryption technology applications, including every digital asset.

Jacob Farber, a partner at Ouroboros LLP, a blockchain law and consulting firm, said that imposing KYC requirements on transactions between each wallet would expand the scope of regulation of cryptocurrencies, which would change the meaning of cryptocurrency to a certain extent and make it no longer a substitute for traditional finance.

Farber also believes that Armstrong’s concerns are valid and said that these potential regulations should be developed and followed by the cryptocurrency community.

Extremely greedy market

Since October, Bitcoin has nearly doubled from $10,000 to $19,500. If calculated from the low point of the year, the price of Bitcoin has risen more than four times from the low point this year.

From the indicators, it can be seen that the "fear and greed" index of Bitcoin transactions has been at a historical high throughout November, which intuitively shows that investors in this type of asset are in a state of "extreme greed".

Normally, any asset will inevitably need to pull back after a rapid rise. From a technical analysis point of view, the $19,500-19,550 range is the last strong resistance range before Bitcoin hits a record high, and the bears may take action.

Therefore, retail investors frantically chased the rise of Bitcoin, laying the foundation for the inevitable crash.

Although the "regulatory rumors" have not been officially reported or acknowledged, they are enough to deter the bulls who have made a lot of profit. According to media statistics, all exchanges have seen asset inflows during the day, including the digital currency exchange Coinbase, and "whale" players are depositing Bitcoin into exchanges for selling. "Whale" players refer to players who own more than 1,000 Bitcoins.

A large number of profit-taking orders were sold at a concentrated rate, further squeezing out highly leveraged contracts. Also, because it happened to be Thanksgiving, many retail investors did not have time to add margin and were forced to close their positions, causing Bitcoin to fall further.

At 3 a.m. and 8 a.m. standard time, futures open interest on the Binance exchange surged by $425 million in just two hours, according to data from data analytics firm Glassnode.