Bitcoin, a massive drop overnight!

According to Coinglass data, virtual currencies have collectively plummeted, with Bitcoin at one point falling nearly 4%. As of 13:00 Beijing time on October 26th, Bitcoin and Ethereum have dropped about 1%, and Dogecoin has dropped about 4%. In the past 24 hours, more than 140,000 people have had their positions liquidated in the virtual currency market, with a total liquidated amount of $391 million (approximately 2.78 billion yuan).

CME Bitcoin futures fell by 2.30% compared to Thursday's New York close, with a cumulative decline of 3.09% for the week. In the last seven natural days, spot Bitcoin has accumulated a 1.87% drop. The CME Ethereum futures DCR main contract has accumulated a 6.95% drop this week.

In the US stock market, stocks related to cryptocurrencies have also collectively plummeted, with MARA Holdings' stock price once falling by 7%, and Riot Platforms falling by more than 5%.

Previously, the OEXN platform stated that the impact of Bitcoin on government fiscal policy is intensifying, and given the risks it poses to the sustainability of maintaining permanent budget deficits, the government should consider taxing BTC or prohibiting its use.

According to reports on October 25th local time, as revealed by informed sources, the US federal government is investigating the cryptocurrency company Tether, which may have violated sanctions and anti-money laundering regulations. This criminal investigation is led by the US Attorney's Office in Manhattan, mainly investigating whether third parties have used this cryptocurrency to fund illegal activities such as drug trafficking, terrorism, and cyber-attacks, or for money laundering.

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The aforementioned report also pointed out that the US Treasury is considering sanctions against Tether, as the company's cryptocurrency is widely used by individuals and groups sanctioned by the United States.

However, Tether's CEO, Paolo Ardoino, immediately posted on social media stating that there is no indication that the company is under investigation.

Tether is a global stablecoin giant, and its stablecoin issued in 2014, backed by fiat currency, is USDT (Tether). USDT is the world's first stablecoin, collateralized by the US dollar, and claims to be pegged 1:1 with the US dollar.

Regulatory authorities have long been keeping an eye on Tether. According to China Securities News, on November 20, 2018, the US Department of Justice announced that it was investigating whether the cryptocurrency exchange Bitfinex and the issuer of the virtual currency USDT, Tether, used USDT to boost the price of Bitcoin.In April 2019, New York prosecutors accused Bitfinex of using Tether's funds to help a payment processing company cover up its loss of $850 million in customer and company funds. In February 2021, both parties reached a settlement, with Tether and Bitfinex agreeing to pay a fine of $18.5 million and being prohibited from conducting business with clients residing in New York.

According to data from the blockchain explorer Mempool, the difficulty of Bitcoin mining increased by 3.94%, reaching a historical record of 95.67 T. The difficulty adjustment occurred at block height 866880 (around 2 a.m. Beijing time on August 23). According to The Block's data dashboard, the seven-day moving average of Bitcoin's network hashrate also set a historical high of 723.6 EH/s, breaking through the 700 EH/s mark for the first time.

Since the Bitcoin halving in April, Bitcoin miners have experienced a significant decrease in revenue. It is understood that Bitcoin's daily production varied before the halving but revolved around the block reward system, with an average of 6.25 Bitcoins produced every 10 minutes. According to the previous block rewards, this equated to approximately 900 Bitcoins produced daily. However, after the halving event, this figure would be reduced to about 450 Bitcoins produced daily.

The current price of Bitcoin is almost at the same level as the price before the halving ($60,000 to $65,000 per coin), yet the miners' output has been halved. According to calculations, if miners sell Bitcoin at $60,000 per coin, the entire mining industry would lose nearly $10 billion in revenue in the year following the halving.

Recently, the price of Bitcoin has been noticeably volatile. It is widely believed in the industry that the outcome of the U.S. election will have a profound impact on the cryptocurrency industry.

According to a report, Yu Jianing, the president of Uweb and co-chair of the Blockchain Special Committee of the China Communications Industry Association, believes that the U.S. election provides an environment where uncertainty and opportunities coexist. The fluctuations in market sentiment and the clarification of policies will dominate the medium and short-term fluctuations in the prices of crypto assets.

In addition, the Federal Reserve's interest rate policies and monetary easing measures, which are usually important issues in the election, are closely related to the crypto market. The prices of crypto assets, especially Bitcoin and Ethereum, tend to benefit from loose monetary policies because low interest rates and a relaxed credit environment attract more funds into risk assets. If the election results indicate that the new administration may adopt more monetary stimulus policies or continue the trend of interest rate cuts, it may further increase investment demand in the crypto market.

The Hai Tong Macro team led by Liang Zhonghua pointed out that in the field of virtual currency policy, Trump actively supports the development of Bitcoin and cryptocurrencies. Trump stated at the Bitcoin 2024 conference that he will maintain the current U.S. government's holdings of Bitcoin and develop the United States into a "cryptocurrency capital" and a "Bitcoin superpower." He also claimed that the Biden administration's suppression of cryptocurrencies and Bitcoin is wrong. His friendly attitude towards the cryptocurrency market has also led to Bitcoin being classified as part of the "Trump trade."

It is worth mentioning that in this year's election, Tesla CEO Musk firmly supports Trump and campaigns for him. Musk's influence in the cryptocurrency market is also not to be underestimated, as his remarks have repeatedly driven the rise and fall of Bitcoin, Dogecoin, and other cryptocurrencies.

Harris also encourages the development of cryptocurrencies but places more emphasis on regulation. Harris emphasizes supporting a regulatory framework for cryptocurrencies and other digital assets to protect investors and those who own these assets.Gao Zelong, Deputy Dean of the Beijing Consensus Blockchain Research Institute and Senior Researcher at the International Blockchain and Cryptocurrency Association, believes that in recent years, the attitude of the American political circle towards cryptocurrencies has shifted from initial neglect to active discussion and even the proposal of specific policy recommendations, indicating that the importance of cryptocurrencies is being widely recognized.

Geoff Kendrick, Head of Digital Asset Research at Standard Chartered Bank, recently stated that before the U.S. presidential election in November, Bitcoin could reach $73,800, which is a 12% increase from its current level.