Bitcoin has dropped below $70,000! Is faith dead?
Today the market further contracted, with a transaction volume of 22 trillion, and the median dropped by 0.7%. Growth stocks have no volume and are generally down. The best performer today was the US healthcare sector at +3.2%, and it seems that consumer stocks in A-shares and Hong Kong stocks have performed reasonably well today, banks up by +1.6%, which is just the classic safe-haven sector. The worst performer was non-ferrous metals at -4.6%, following fluctuations in gold and silver, and electrical equipment at -3.4%, mainly due to clarifications from solar stocks.
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The cryptocurrency market has been shattered these days. Bitcoin briefly dropped below $70,000, which reached $126,000 last October, falling 44% from its peak. Now, it is estimated that the current electricity mining cost is around $71,000, with electricity costs accounting for about 60% to 80%, followed by hardware costs, which means that mining is currently at a loss.
What happens if there are losses? There will be no new Bitcoins, but actually, it won't matter much; it's hard to expect a quick recovery. For example, it's like the prices of cyclical goods falling below cost; how long can this loss-making deal last? Look at the chemical industry now, some segmented chemicals have actually been operating at a loss for two to three years.
Historically, Bitcoin has a cycle of about four years, and now it has reached the bottom; it is estimated that we still have to endure for a while. Similarly, cryptocurrency-related stocks in the US have performed terribly, with the second place CRCL reaching a maximum of $263/share, now it's about $55/share, partly due to market conditions and partly due to the impact of US Treasury bond interest rate cuts; Figure has also taken a significant hit these days.
