Bitcoin Blowout: What The Heck Happened Last Week And Can We Blame China For It?

A model of the digital cryptocurrency bitcoin is on display at the zhengzhou network security science and technology museum on November 27, 2020 in zhengzhou, henan province, china. (photo by liu yanfeng/vcg via getty images)

what the hell happened to my bitcoin last week?

Reading: Bitcoin china blackout

I’ve been taking some off the table since hitting all-time highs, and loaded my bitpay mastercard with some winnings. i remember where bitcoin was in march 2020. around $5,000. I’m not scared yet.

what happened last week? can we blame china for it? says an outage caused by a power plant in western China has sidelined some bitcoin miners. The source for them was a Chinese journalist named colin wu (@wublockchain) who had tweeted about power grid blackouts in xinjiang. as a result, the power of the computer network used to “mine” bitcoins, known as the “hashrate,” fell by as much as 49%. so maybe we can blame china.

nic carter, co-founder of blockchain data aggregator, also pointed out that xinjiang was exploiting bitcoin mining.

said bitcoin’s hash rate decline shows how much mining resides in china.

I’m fine with blaming China for last week’s sell-off.

president biden’s announcement of a capital gains increase might have spooked goldman sachs gs’s millionaire clients, but to my knowledge, that shouldn’t stop anyone from investing. at worst, it would prevent them from investing in markets with high capital gains tax visibility. they would move to the coast. they would move to cryptocurrencies.

as of Sunday afternoon, btc is up 2.28% and topped $50,000.

See also: Bitcoin price plunge shrinks paycheck of NFL’s Odell Beckham Jr

james sparks, dubai product manager for bitpapa, a cryptocurrency exchange founded in 2018, disagrees that the blackouts in china caused bitcoin to crash.

“yes, it is true that more than half of the mining pools are installed in china. but individual miners can connect to a mining pool from anywhere in the world,” she says.

A large portion of China’s bitcoin miners are located in the western province of Xinjiang. (photo of budrul… [+] chukrut/sopa images/lightrocket via getty images)

One of the biggest shortcomings of investing in cryptocurrencies is their high volatility. Many investors love the volatility when the market is up and they’re invested, but when Bitcoin goes in the opposite direction, “things get ugly fast,” says Sparks. “Speculative buying and selling can be a great option when you’re following the trend.” long-term investors also look for price drops to buy at a discount.

Bitcoin first hit the market in 2009 and has risen from just $15 per coin to record highs of over $60,000 in intraday trading just under two weeks ago. With the cryptocurrency market now valued at over $2 trillion dollars, including non-BTC coins, the investment universe has grown. one day, bitcoin will be a smaller slice of the overall market than it is now.

for now, bitcoin powers everything. if bitcoin is sold, everything is sold. And the longer Bitcoin sells, the stronger the headwinds become for other cryptocurrencies, like Elon Musk’s favorite Dogecoin.

in the most recent edition of alpha alarm, now a forbes newsletter, joseph young spoke with some analysts from whalemap, trackers of large cryptocurrency investors. they said the smart money was holding (or hodling, in crypto parlance, which means the same thing).

“We can see a lot of new whale addresses forming on the blockchain and the behavior of the hodlers clearly indicates that they are not looking to sell at the moment,” the anonymous whalemap analyst told alpha alarm on April 23. . “The overall macro situation looks similar in many ways to the start of the 2017 bull run.”

side note: I noticed in my coin base history that I had sold 1 whole bitcoin in 2018 or so for around $6,000. if he had, he would have had 10 times that amount for a coin. As more professional investors get in on the action, the best advice may be “never sell your bitcoin.” there will be more demand. that’s the simple explanation.

bulky support banks like goldman sachs, morgan stanley and jp morgan all say their high net worth clients, loaded with enough stocks and bonds and mlps and reits to sink a battleship, are asking for more and more crypto .

mary rich, director of digital assets at goldman sachs, told cnbc last month that they will eventually offer a “full spectrum” of investments in digital assets, including crypto derivatives.

See also: Archive – Nic Carter

This is the brave new world of finance. this is what investing in it looks like:

greyscale bitcoin etf over the past 12 months vs nasdaq and ishares msci emerging markets index. a bit extended…

A look at some of the top grayscale bitcoin etf hodlers. ark investment leads this market. … [+] smaller private wealth firms are building. the market expects this trend to continue, rather than plateau.

When markets fall, everyone looks for excuses. is china the answer to last week’s correction in bitcoin? or it was just as likely that thousands of investors, myself included, were choosing to take some money off the table and put it to work elsewhere. I am putting moldings around the windows of my house; a summer project, paid for in full thanks to the recent bitcoin bull run. I’ll take it. im still loaded with bitcoin. Due to its increase over the last year, I now have more value in bitcoin than in my e*trade short-term investment account by a factor of five. that’s crazy

sparks from dubai tells new retail investors not to get too hung up on daily price movements in bitcoin.

“the last year saw real growth, which is what many cryptocurrency enthusiasts were eagerly awaiting,” he says of bitcoin’s $50,000 end-2020 predictions. the market nailed that.

“Overall, it is worth noting the rise in popularity of the crypto space. it goes way beyond the usual hype and goes beyond bitcoin,” he says. “The attention institutional money is giving bitcoin should not be underestimated. it’s hard to know how much influence financial institutions have in the market,” he says, but he praises bitcoin’s rise, even if it hasn’t yet had its moon landing. what exactly is the “bitcoin moon”? Is it $100,000 per coin? is it $1 million?

if so everyone should have at least $1000 in grayscale bitcoin etf. just put it in there and let it run and see what happens at this point because there are more people in the market who believe in the bitcoin moon than there are believers in the bitcoin crash landing.

“Think about this for a second: a fairly simple algorithm is advancing to become a modern, sought-after technology that turns out to have a major economic impact on the world in about ten years and generates the interest of millions of people.” says sparks about bitcoin’s rise to stardom.

good point. bitcoin is not going to disappear even if xinjiang, china goes dark.

; )

See also: Heres Why Quantum Computing Will Not Break Cryptocurrencies

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