In December, the cryptocurrency market is like a switch pressed for a "roller coaster," with Bitcoin currently priced at $92,500, down over 31% from the high of $126,300 in October, and the annual gains have all been wiped out.
In this wave of market changes, my friend Lao Zhang's experience is quite representative: he entered the market at a high in October, and when Bitcoin crashed below $87,000 on December 1st, his five-fold leveraged long position was forcibly liquidated, leaving him with less than $50,000 from an initial capital of $300,000.
Behind the volatility of the market are multiple factors resonating together. The Federal Reserve's delayed interest rate cut expectations tightened liquidity, and on December 1st alone, 190,000 people were liquidated, with the liquidation amount reaching $553 million.
However, in the early hours of the 3rd, a rebound came, with Bitcoin soaring 9.5% from $84,000 back to $92,000, and this severe fluctuation precisely exposes its high-risk nature.
For ordinary investors, Bitcoin has never been a "sure profit product."
From a regulatory perspective, our country clearly defines related activities as illegal financial activities, while from a market perspective, high-leverage trading is akin to gambling.
Rather than chasing short-term fluctuations, it is better to see its essence of lacking actual value support—this may be the rational understanding that the cryptocurrency circle needs most at present.
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