"312" 2nd Anniversary, Revisiting History and Respecting the Market

Just as old A-share investors have a deep memory of the historic stock market crash of two-day circuit breaker and thousand-share limit-down, "312" is an unforgettable memory for encryption practitioners. On March 12, 2020, the cryptocurrency market experienced a tragic 24 hours. On the second anniversary of "312", Rhythm once again "revisited" the scene of the year, reminding myself that no matter the bull or the bear, always remain in awe of the market .

We go from point to surface. Starting at 6:30 pm on March 12, 2020, cryptocurrencies led by Bitcoin suddenly began to plunge, and everyone was caught off guard. The quotes of the market software are constantly flashing, and the price of Bitcoin starts from 7,000 US dollars, falling without resistance, and the rate can reach 5%/minute. $6800, $6500, $6000, $5000, $4500, smashing everyone's luck along the way. At around 7:00 on the 13th, after a short period of stabilization, Bitcoin fell again, falling to $3,800 at one point. Within 24 hours, it plummeted by nearly 50%.

According to Coin data, in just 24 hours, more than 100,000 people experienced liquidation on the entire network, and the largest single liquidation occurred in Huobi, BTC is worth about 58.32 million U.S. dollars, and the total amount of liquidation on the entire network is 2.93 billion U.S. dollars, or about 20.5 billion yuan.

What was even more dramatic was that BitMEX, the trading platform with the largest short positions at that time, suspended the trading function of the platform on the morning of the 13th, commonly known as "unplugging the network cable". In a way, this saved Bitcoin. In the process of falling without resistance, there is no buy order on BitMEX. If the network cable is not pulled out, the price of Bitcoin on the platform will return to zero. At that time, other trading platforms were also overwhelmed, and the arbitrage robot had already exceeded its scope of work, and the price difference between bitcoins among various platforms was as high as $1,000.

Bitcoin's plunge is not a problem with commodity attributes, but a black swan microcosm in the global financial market.

Looking at the global macro-assets, on February 19, 2020, Nasdaq began to fall the next day after hitting a record high of 9838. It was the prelude to the slump in the entire global market. After the expectations of the U.S. economic stimulus policy fell through and the market showed concerns about the new coronavirus, U.S. stocks rarely ushered in a historic situation of two circuit breakers in a single week. The Nasdaq index fell 8.4% in a single day.

During this process, the panic in the global stock market has intensified. The three major European stock indexes and the Asia-Pacific stock market have all experienced different degrees of retracement. At least 10 stock indexes have experienced circuit breakers , suspended trading, and entered a technical bear market.

Commodity markets have seen a more serious bloodbath. Affected by the expected failure of the OPEC production reduction agreement and the changes in the supply and demand pattern caused by the economic environment, after the U.S. crude oil index plummeted by more than 8% on March 6, it once again experienced a historically rare plunge on March 7, with a drop of more than 30%.

Everyone knows the story behind. But "312" is the alarm bell. No matter how big the bull market is, not everyone can return with full rewards. They are in awe of the market and always remind themselves to have risk control. The principal is the capital and the foundation of being able to survive in the market.  

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