The stock market circuit breaker caused a surge in Bitcoin. What the hell?

Today, the word "circuit breaker" was mentioned again in the circle of friends. On one hand, people who play stocks are in a bad situation, while on the other hand, people who hold Bitcoin have basically made money. So what exactly is this circuit breaker?

Basic knowledge: China has been piloting the circuit breaker mechanism since 2016. The A-share circuit breaker refers to the CSI 300 Index. If the CSI 300 Index rises or falls by more than 5% before 14:45 on the same day, the stock market will suspend trading for 15 minutes; if the CSI 300 Index rises or falls by more than 5% after 14:45 on the same day or the rise or fall exceeds 7% throughout the day, trading will be suspended until the market closes.

At 9:42 this morning, the CSI 300 Index fell by 5%, triggering the first circuit breaker. According to regulations, trading needs to be suspended in order to stabilize market sentiment and avoid a large-scale stock price drop. Unexpectedly, a dramatic scene occurred 15 minutes later. After the resumption of trading at 9:57, the CSI 300 Index fell again and triggered the second 7% circuit breaker, setting a new record in the stock market.

I just sat in my office chair for a few minutes, but the stock market has already closed and traders can leave work early. Tsk tsk~

The stock market suffered a terrible fall, but the Bitcoin market was extremely jubilant.

At around 9:58 in the morning, the price of Bitcoin began to rise suddenly, from 2810 to 2900 in a few minutes. As of press time, the price of the currency has reached 2950 yuan. Let’s not care who is pushing up the price, those who hold the currency have made a profit anyway.

(Image from: btc38.com)

The phenomenon is obvious, so why does this happen? Here are some of my humble opinions:

Why did the stock market fall so badly? First, the continued depreciation of the RMB is an inevitable factor, and investors are inevitably a little nervous. The offshore RMB exchange rate against the US dollar yesterday hit its lowest point since September 17, 2010. Second, the China Securities Regulatory Commission continues to introduce new policies, the purpose of which is to maintain the stability of the securities market, but in the short term, the introduction of new policies will inevitably cause further panic in the market. Third, there are huge hands manipulating the market.

What does the rise and fall of the stock market have to do with Bitcoin? Is it because Bitcoin is traded 24/7, T+0, which provides more room for speculators to play, so funds are flowing into the Bitcoin market? Of course, we do not rule out the possibility of such a thing, but the wave this morning is probably related to what we often think of as "bankers". As for how the market will go next, I dare not speculate.

Finally, let me show off: "Circuit breakers" are still a new thing in mainland China. I think they will have a certain impact on the Bitcoin market in the short term, but to truly see the general trend, we have to look at the development of Bitcoin itself.