‼️🔥Double Storm in the Crypto World: Regulatory Definition of Stablecoins + Bitcoin Flash Crash Leads to 270,000 Liquidations
🥳Since December, the cryptocurrency market has faced a dual impact of stringent regulations and a sharp price drop, with the controversy over the definition of stablecoins and the Bitcoin flash crash becoming core hot topics, as market panic continues to spread.
The central bank has explicitly defined stablecoins for the first time, shattering the illusion of “exceptionalism.” Recently, the People's Bank of China led a meeting to coordinate efforts to combat virtual currency trading speculation, publicly classifying stablecoins as virtual currencies for the first time, directly pointing out risks such as money laundering, illegal fundraising, and violations of cross-border fund transfer regulations, which do not meet anti-money laundering and customer identity verification requirements. This regulatory signal directly pierced the crypto community's expectations of “special compliance” for stablecoins, leading related Hong Kong stocks to plummet, with Huajian Medical falling over 15%, and Yunfeng Financial, OkexChain, and others dropping over 8%. Regulatory bodies emphasized their continued adherence to prohibitive policies regarding virtual currencies, with multiple departments working to build a cross-entity risk monitoring platform, strengthening banks' anti-money laundering monitoring and payment institutions' channel control, further compressing the living space for illegal transactions.
Meanwhile, the cryptocurrency market has encountered a “black storm,” with the Bitcoin flash crash triggering a wave of liquidations across the network. On December 1, Bitcoin plummeted 8% during the session, dipping to $83,786, the lowest since April, with mainstream coins like Ethereum and XRP also seeing declines of over 6%. As of December 2, more than 270,000 users across the network were liquidated within 24 hours, with total liquidations reaching $985 million, of which over 88% were from long positions. The main reason for this sharp decline was the cooling expectation of a Federal Reserve interest rate cut in December, with market concerns over tightening liquidity prompting investors to withdraw from high-risk assets, compounded by Bitcoin's cumulative decline of over 30% since its historical high in October, with the “four-year cycle theory” prompting whales to continue reducing their positions.
Despite market turbulence, a number of crypto projects focusing on practical value have grown against the trend in the fourth quarter. IPO Genie attracted over $500 million in investment with its AI + private equity tokenization model, Bitcoin Hyper saw a surge in users with its 3-second block time cross-chain solution, and projects like GreenLayer and LendSphere, which integrate ESG and AI risk control, have also achieved rapid expansion through practical application scenarios, highlighting a new market trend of “utility being king.”
