Beijing Business Daily reported that Bitcoin fell by nearly 10%, Ethereum fell by 9%, SOL fell by 11%, and Dogecoin fell by 9.4%… In the past week, not only Bitcoin, but the entire cryptocurrency market experienced a severe setback. However, this did not affect the exchanges’ customer acquisition business. The Beijing Business Daily reporter noticed that exchanges are still inviting users to copy transactions. What seems like “profitable” trading is actually fraught with risks due to the extreme price fluctuations.
From June 20th to June 25th, Bitcoin fell from a high of $66,000, subsequently dropping below $65,000 and $64,000. On June 24th, it plummeted again, falling below $60,000 to $59,772. However, as of 6:10 PM on June 26th, Bitcoin prices have rebounded slightly, reaching $61,328, a 0.27% drop in 24 hours, a 5.39% drop in one week, and a high of 9.55% drop in nearly a month.
“Every time it falls, it feels like it will rebound, but it continues to fall. It’s really hard to watch my account shrinking,” a cryptocurrency investor told the Beijing Business Daily reporter. “Bull runs are too difficult. Every time there’s a burst, I believe there will be a rebound, but every time it just keeps bursting. It’s almost like a ‘firecracker factory’.”
With Bitcoin’s plunge, other cryptocurrencies in the market also suffered. Ethereum’s drop reached 10.27% in a month; SOL dropped 2.36% in a week and over 18.59% in a month; Dogecoin plummeted by as much as 22.66% in a month.
The recent sharp decline in Bitcoin and the cryptocurrency market is seen in the industry as the result of multiple factors. As Yu Jianing, co-chairman of the Blockchain Professional Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, pointed out in an interview with the Beijing Business Daily reporter, global macroeconomic uncertainty and financial market volatility directly affect the cryptocurrency market. In particular, the drop in NVIDIA’s stock price from its all-time high has curbed the further rise of NASDAQ technology stocks and reduced the fervor of some US stock markets, further affecting investors’ confidence in high-risk assets.
On the other hand, technical factors within the market are also significant. Bitcoin’s consecutive break of multiple key support levels in the short term has triggered a large number of stop-loss orders, exacerbating the price decline. At the same time, the massive selling behavior of some major holders has impacted the market, triggering a chain reaction and leading to more small and medium-sized investors following suit.
Despite the continuous price drops, Bitcoin’s price remains relatively high compared to the end of last year. Therefore, some speculators are still entering the market, and even pushing newcomers to join under the marketing promotion of some platforms.
The Beijing Business Daily reporter noticed that Binance, a cryptocurrency exchange, has recently been inviting users to copy transactions frequently, claiming to participate in a simulated copy trading competition or experience the sliding function and copy trading through the “Explore” module to share 30,000 USDT.
The seemingly easy-to-participate copy trading hides significant risks.
“The relatively high risk of exchanges inviting users to copy transactions,” Yu Jianing said, is that copy trading essentially allows investors to replicate the operations of other traders. This may lead to the loss of independent judgment by investors, who blindly follow market fluctuations. Many “star” traders on copy trading platforms may perform well in the short term, but their strategies may not necessarily be suitable for all investors, especially in times of extreme market volatility, which presents significant risks.
Additionally, such activities by exchanges may lead to excessive trading behavior. Frequent trading not only increases trading costs but also exposes investors to greater risks in a highly volatile market. In an unstable market, frequent operations in the short term could lead to serious financial losses, and investors should be cautious.
It is worth noting that such activities by exchanges may also hide potential conflicts of interest. For example, some smaller platforms may increase trading volume to earn more trading fees, and there may even be suspicions of market manipulation. When participating in these activities, investors should remain vigilant, carefully read the relevant rules and terms, and avoid becoming tools for platform profits.
“Some copy trading operations are scams; you are greedy for the price difference, while others are greedy for your principal. Even if it’s not a scam, this kind of copy trading itself is meaningless,” said well-known economist Pan Helin.
Regarding the risks associated with copy trading, the Beijing Business Daily reporter sought confirmation from the person in charge of Binance, but as of the time of publication, no response has been received.
In fact, in addition to the risks of copy trading, the industry believes that investors also need to be wary of other issues in the cryptocurrency market.
For example, the risk of market manipulation. The cryptocurrency market is relatively less regulated than traditional financial markets, making it susceptible to manipulation by large holders (“whales”), resulting in significant price fluctuations. There are also security risks, as security measures at many exchanges are inadequate, leading to frequent occurrences of events such as hacking attacks and fund losses, making it difficult to guarantee the security of investors’ funds.
According to Yu Jianing, the trend towards mainstream, compliance, and institutionalization is irreversible for the cryptocurrency industry. In the early stages of the development of digital assets, global investors were mainly retail investors. However, as the market system has gradually matured, the proportion of institutional investors has been increasing in recent years, making them important participants in the market. Compliance is an important step for the cryptocurrency market to move towards mainstream. Regulatory authorities in various countries are gradually introducing relevant policies to regulate the trading and management of digital assets. These policies aim to prevent market manipulation, money laundering, and other illegal activities, while protecting the rights and interests of investors.
Beijing Business Daily reporter: Liu Sihong
