On Thursday Eastern Time, the three major U.S. stock indices all closed down. Two regional banks in the U.S. recently revealed loan issues, with Zions Bank plummeting 13% and Western Alliance dropping 10.8% on Thursday. The banking loan problems have sparked market concerns, causing the U.S. regional bank index to fall nearly 7% and leading to a loss of over $100 billion in market capitalization for the 74 largest banks in America.
The VIX index, often referred to as the "Wall Street Fear Index," surged, reaching its highest closing level since April 24.
In another shocking development, around 210,000 people in the cryptocurrency market faced liquidation. The cryptocurrency-related stocks in the U.S. experienced significant declines. As of October 17 at 7:28 AM, the price of Bitcoin fell below $109,000, with nearly 210,000 liquidations occurring, amounting to a liquidation value of $733 million.
According to various reports, around 3 AM Beijing time, there was a sudden and fleeting occurrence of a $300 trillion stablecoin in the cryptocurrency market. Paxos, a partner of PayPal in the crypto sector, minted 300 trillion PayPal stablecoins (PYUSD) on the Ethereum blockchain, which theoretically had a value corresponding to $300 trillion. Paxos subsequently announced that this was due to an internal transfer error, resulting in an excessive minting of PYUSD.
Trading records show that Paxos then minted 300 million PYUSD as per standard operations. The nature of this incident is straightforward: Paxos mistakenly recorded 300 million as 300 trillion.
This incident temporarily disrupted the decentralized financial market, causing PYUSD's price to briefly deviate from its $1 peg, before stabilizing as the excessive stablecoins were redeemed.
Gold continues its upward momentum, reaching $4,380 by October 17.
Many institutions have alerted to the risks. On October 16, the Shanghai Gold Exchange issued a notice to its members, stating that international precious metal prices are experiencing severe fluctuations and urging members to enhance risk awareness. Recently, several banks, including ICBC and CCB, have raised the purchase thresholds for accumulated gold while also issuing warnings about the volatility of precious metal prices.
Looking ahead, several institutions believe that the long-term factors supporting gold prices remain unchanged. Guotai Asset Management suggests that the combination of the Federal Reserve entering a rate-cutting cycle, increasing uncertainty in overseas macro policies, and a global trend towards de-dollarization provide certain support to gold prices.
However, given the historical highs of gold, institutions generally advise against blindly chasing prices. A strategy of "long-term investments with dollar-cost averaging and buying on dips" is widely recognized as a more prudent approach. Several interviewed experts advised that a better way for ordinary investors to participate in the gold market is through regular investments while strictly controlling positions and avoiding leverage unless one is a professional investor.
(Disclaimer: The article content is for reference only and does not constitute investment advice. Investors should operate at their own risk based on this information.)