15 years after its birth, Bitcoin hit a record high, and what happened in the 800 days since it returned to a single coin of $69,000?

Written by: Rhythm BlockBeats

Bitcoin is writing a new history of encryption.

At 23:05 on March 5, the price of Bitcoin briefly reached US$69,005. After crossing the US$69,000 mark, the market value of Bitcoin Reaching US$1.35 trillion, it surpassed Meta Platforms and jumped to the 9th place in the world's mainstream asset market value. This is the latest all-time high since the creation of Bitcoin’s first block in January 2009. This means that in this round of crypto bull market, the rising price of Bitcoin has been opened up and will create more new history.

$69,000 three years ago

Recalling the last round of crypto bull market, it was the US dollar that was drained bull market.

At the beginning of 2020, the COVID-19 epidemic struck, the U.S. economy suddenly declined, and the unemployment rate rose sharply. Against this background, the Federal Reserve launched a combination of "zero interest rates + quantitative easing" monetary policy tools, which meant that the lower limit of the federal funds rate was significantly lowered twice in a row, from 1.5% to zero, and it announced unlimited purchases of Treasury bonds and MBS (mortgage-backed securities). ). This is the second time the Federal Reserve has embarked on a large-scale monetary easing process following the "subprime crisis" in 2008.

As a result of this currency "water release", the size of the Federal Reserve's balance sheet expanded 1.1 times in 26 months, from 4.2 trillion at the end of January 2020 The US dollar expanded to US$9 trillion at the end of March 2022, an increase of US$4.8 trillion. The absolute scale of "water release" far exceeds that during the 2008 sub-credit crisis. More importantly, after these two currency "water releases", the trend of price, an important macroeconomic indicator, showed significant differences. In the same year, the conflict between Russia and Ukraine triggered a rapid rise in global energy and food prices, which also contributed to the situation.

If there is too much hot money in US dollars, it will inevitably flow to various markets around the world, including Bitcoin.

Bitcoin rose more than 300% in 2020, rising nearly 50% in December alone. Since then, Bitcoin has soared more than 120% since the start of spring 2021, hitting a then-high of nearly $65,000 in mid-April, kicking off a roller coaster ride.

U.S. cryptocurrency trading platform Coinbase went public in April, with a valuation of $86 billion on its first day of listing, making it the largest listing of a cryptocurrency company to date. By May the price of Bitcoin fell 35% before surging to an all-time high of $69,000 in November.

LUNA collapse triggered a series of market liquidations

In May 2022, the Nasdaq index continued to decline, and the market The response to the macro situation was extremely pessimistic. The price of Bitcoin also fell by nearly 10% for several consecutive days. Panic spread rapidly throughout the entire crypto market. The collapse of Luna even staged an epic disaster movie in the crypto market.

In order to build its own strong 4Crv pool, the Terra ecological core team LFG (Luna Foundation Guard) withdrew from the UST-3Crv pool on May 8 However, just 10 minutes after the UST liquidity of 150 million US dollars was withdrawn, a new address suddenly sold 84 million US dollars of UST, seriously affecting the balance of the 3crv pool. In order to maintain the balance of liquidity in the UST-3Crv pool, LFG withdrew another $100 million in UST from the pool.

Affected by this, multiple whale accounts began to sell UST on Binance. The amount of each transaction was millions of dollars, and UST also began to decouple. It was also from this day that a large amount of UST locked in Anchor flowed into the market, further causing selling pressure on UST. As UST failed to return to its peg in the long term, UST began to sell off massively, falling below the $0.95 threshold.

On May 10, Jump Trading and LFG stopped selling Bitcoin savings to protect the peg, allowing the situation to worsen, and UST plummeted all the way to $0.6. This $300 million death spiral also ultimately led to Luna’s collapse.

Related reading: "84 million US dollars leveraged a 40 billion financial empire, the whole story of UST's collapse》

Luna founder Do Kwon was arrested in Montenegro

Sanjian, Galaxy Digital VCs and market makers such as , Jump Trading, etc. have selectively ignored the strong financial attributes of Luna and put the Terra ecosystem dominated by Anchor into the public chain narrative, keeping pace with the ecosystems such as Solana and Avalanche, and constantly promoting "Solunavax".

After Luna collapsed, everyone in the encryption field was panicked, and operations visible on the chain became more frequent. After stETH became unanchored, Celsius first encountered problems. This CeFi lending platform, which is well-known in Europe and the United States, has 1.7 million users and manages assets of over 30 billion US dollars. It was eventually forced to suspend all withdrawals due to a liquidity crisis, becoming the second largest lending platform after LFG. A "martyrdom" encryption institution.

So in just one month, Luna’s $40 billion financial empire collapsed overnight, ETH 2.0, the world’s largest decentralized node, Lido derivatives, detached, and the largest crypto bank in the United States. Celsius suspended withdrawals, followed by the liquidation of Three Arrows Capital, which was said to have held $18 billion in crypto assets at one point.

Related reading: "From Celsius to Three Arrows: The Dominoes of Crypto Billionaires, the Depletion of Epic Liquidity》

Nothing Doubt, the crypto market at that time was experiencing its own Lehman moment. In order to prevent the liquidation from deteriorating further, external funds were often needed to rescue the market. However, unfortunately, we caught up with a wave of interest rate hikes that was rare in history: the Federal Reserve raised the benchmark interest rate again. 75 basis points to the range of 1.50% to 1.75%; in Europe, Italian government bond yields continued to rise, and the European Central Bank held an emergency special meeting yesterday to discuss response strategies and raise interest rates in advance.

As a volatile market, crypto will undoubtedly be one of the areas with the fastest liquidity crunch. The liquidation of mainstream ecology and institutions has caused the overall credit scale of the market to shrink rapidly, further reducing the capital flowing in the market, and further drying up liquidity. Therefore, the market situation has deteriorated exponentially.

The climax of the FTX thunderstorm

The thunderstorm of the 40 billion US dollar financial empire LUNA A few months later, in November 2022, the frightened market ushered in the biggest black swan in the history of cryptocurrency: FTX, the world's second largest trading platform with a valuation of US$32 billion, also suffered a thunderstorm.

The most direct cause of thunderstorms is runs. A reporter published a balance sheet of Alameda Research (another company of FTX founder SBF) that he obtained, and then the market discovered that the assets of this market-making investment institution owned by FTX founder Sam Bankman-Fried were all SBF's own currency, for example, a large part is FTX's platform currency FTT. In other words, the value is extremely unstable and can return to zero at any time.

Because of the well-known relationship between FTX and Alameda Research, the frightened market no longer dared to trust anyone. Users immediately started withdrawing coins, and overnight FTX processed 60 Billions of dollars in currency withdrawal demand. It’s a pity that SBF’s FTX is indeed out of money. According to SBF, Alameda made a mortgage loan to FTX, and FTX lent the assets to Alameda. In any case, users' money in FTX is no longer in their accounts. This super unicorn, backed by Washington and backed by the world's top VCs, has gone from a valuation of US$32 billion to a capital hole of US$8 billion. Less than a week.

Exactly one year after Bitcoin hit a new all-time high, market confidence hit rock bottom with the thunder of FTX. When LUNA, the top 5 in market capitalization, and FTX, the world's second-largest cryptocurrency, are both in trouble, cryptocurrency players can only wait in despair for confidence to be rebuilt, but no one knows how long it will take.

Crypto’s KOL not long ago The latest prison photo of SBF (second from right) was exposed. He is thin and looks completely different from before

Binance reached a sky-high US$4.3 billion settlement with the SEC

BlockBeats Message, On November 22, Binance announced that it had entered into cooperation with the U.S. Department of Justice (DOJ), the U.S. Commodity Futures Trading Commission (CFTC), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), and the Financial Crimes Enforcement Network (FinCEN) on historical registration and cooperation. issues of regulations and sanctions. The settlement marks the company's acknowledgment of past criminal compliance violations and says it will use it as an opportunity to lay the foundation for growth over the next 50 years. Subsequently, Binance founder CZ announced his resignation as CEO. The new CEO will be replaced by Richard Teng, the company's former head of global regional markets.

Binance founder CZ appeared in Seattle court

A fine of US$4.3 billion is the largest fine in the history of Chinese entrepreneurship. The only thing that can be compared with this amount is Alibaba's 18.2 billion yuan fine three years ago, which is "only" 65% of Binance, the world's largest cryptocurrency trading platform. Even looking at the global Internet giants, the US$4.3 billion fine is one of the largest in history.

CZ said in a tweet that although this decision was not easy emotionally, for the sake of the community, Binance and personal interests, he must accept past mistakes and take responsibility . He believes Binance has a strong team and will continue to grow and optimize.

Related reading: "The CZ era of Binance has come to an end, which may be the greatest 6 years for Chinese entrepreneurship》

With the changes in Binance and regulation After the settlement and a loss of 4.3 billion, the biggest uncertainty in the market "boots have landed". Bitcoin is hovering at 40,000 US dollars. The currency circle has slowly regained confidence. Everyone believes that there will no longer be any blackmail in the start of this round of bull market. The swan incident.

"Open the ceiling" Bitcoin spot ETF

If we say, this round of bull market The biggest catalyst for the launch is the passage of the Bitcoin spot ETF, so the biggest contributor to Bitcoin's historical high is Wall Street.

The role of Bitcoin spot ETF is to bring a large amount of over-the-counter funds to the crypto market, giving Wall Street a formal channel to allocate crypto assets. Although many institutions also intervened in the last cycle, the increasing acceptance of large companies such as Tesla and Mastercard, and the increasing favor of Wall Street banks, have promoted the rise of Bitcoin. But compared with the amount of money that has flowed into this round of ETFs, it pales in comparison.

Let us first rewind the time to August 2023, and review the past half year of Bitcoin, from US$25,000 to the present, the key nodes for Bitcoin’s rise Almost all of it is driven by ETFs. Whether it is a lawsuit victory or fake news, the excitement of the news has always affected the market. On August 30, 2023, Grayscale won its lawsuit with the SEC, overturning the SEC’s decision to block Grayscale’s ETF. Bitcoin stands firm at $34,000 as fake news swirls about October’s adoption of a Bitcoin spot ETF.

On January 11, we finally received the exact news about ETFs. The SEC also approved 11 spot Bitcoin ETFs, six of which will be listed on the Chicago Board Options Exchange (CBOE). ), three will be listed on the New York Stock Exchange (NYSE) and two will be traded on Nasdaq. Bitcoin prices hit $48,590 on the day.

Related reading: "Go down in history! The adoption of the Bitcoin spot ETF opens a new chapter for the crypto industry》

Data show that from January 21 to 26, the total assets of Bitcoin ETFs under management The scale dropped from US$29.160 billion to US$26.062 billion in 5 days, a loss of more than US$3 billion. Since February, the total assets under management of Bitcoin ETFs have risen steadily from $28.3 billion, surpassing $40 billion in less than a month.

With the massive inflow of funds, the price of Bitcoin has experienced a major rise. Throughout February, the price of Bitcoin has experienced the largest fluctuation in history. , the price per Bitcoin increased by $18,615, which is higher than the value of Bitcoin 15 months ago.

Historical highs are just the beginning

Different from the high leverage of the previous bull market, this one The price of Bitcoin in this round was supported by the net inflow of "real money" from Wall Street after the adoption of ETFs.

According to data on February 28, The total trading volume of 9 Bitcoin spot ETFs yesterday was approximately US$2.4 billion, which was the highest record since the first day of listing. It was slightly higher than the trading volume on the first day of listing, and was approximately US$2.4 billion in recent days. twice the average trading volume.

Among them, the trading volume of the Bitcoin spot ETF IBIT of iShares, a subsidiary of the asset management giant BlackRock, reached an astonishing US$1.3 billion, among all ETFs Ranked 11th (top 0.3%) and among top 25 stocks. Bloomberg ETF analyst Eric Balchunas posted on social media: "This is absolutely a crazy number for a newly listed ETF."

Since January 10, BlackRock’s IBIT holdings of Bitcoin have continued to grow, from 228 Bitcoins to 126,900 Bitcoins today. . As the world's largest asset manager, it manages approximately $8.9 trillion globally. It is the most competitive among many ETF products in terms of customer resources and brand effects. Currently, BlackRock Management and Fidelity Investments’ Bitcoin ETF positions exceed MicroStrategy’s 190,000 positions.

As for everyone in the currency circle The question that everyone is most concerned about: "Where will Bitcoin go in this bull market?"

Matrixport, the most popular crypto analyst in the currency circle Markus analyzed in an exclusive interview with BlockBeats that many people have underestimated the influence of spot ETFs. He predicted that this bull market may last from February to September next year, and Bitcoin will rise to $125,000 in this cycle. We are now We are halfway through a bull market.

Related reading: "Exclusive interview with Matrixport analyst Markus: Bitcoin will reach $125,000, and the bull market is only half-way》

As for what may happen in this bull market In the event of a black swan incident, Markus said that the only possibility is that someone can access Satoshi Nakamoto’s wallet. "The inflow of gold ETF funds has entered the Bitcoin ETF, and Bitcoin is becoming a better macro asset than gold." At the end of the interview, Markus said this.