Author: James Source: blocktempo
The state of California in the United States, particularly the Los Angeles area, has recently been ravaged by severe wildfires, causing the destruction of thousands of luxury homes, with even Hollywood stars becoming victims. So far, 5 lives have been lost, and nearly 180,000 people have been ordered to evacuate. The outgoing President Biden has been forced to cancel his scheduled visit to Rome today and is instead coordinating the government's response to the fires from the White House.
AccuWeather reported on Thursday that the economic losses caused by these wildfires are estimated to be between $135 billion and $150 billion, including insured and uninsured losses, making it one of the most severe wildfire disasters in modern American history. The total losses and economic impact of this wildfire could be close to 4% of California's annual GDP.
Local Residents and Crypto Companies Affected
According to Protos, in addition to threatening millions of California residents, this California wildfire has also posed a threat to several local cryptocurrency companies and industry-renowned individuals. In fact, many have lost their homes and belongings, including precious cryptocurrency hardware wallets. One netizen revealed on Twitter:
My 70-year-old aunt lost her apartment in the Los Angeles fire. Most of her savings were in cryptocurrencies, and she lost her wallet and seed phrase, with no backups. I'm devastated, this was her entire life savings.
Is the Crypto Market Crash Related to the California Wildfire?
Notably, as the news of the fire broke out, Bitcoin has been experiencing a continuous decline, reaching a low of $91,203 this morning, a new low since December 6th, 2020.
The uncertainty caused by disasters typically exacerbates market panic, and the cryptocurrency market is particularly sensitive to this. Investors' risk-averse mentality may further amplify market volatility.
Additionally, the insurance payout pressure caused by the fire may indirectly affect insurance companies' investment preferences in high-risk assets, and these chain reactions could further weaken the market's liquidity and stability.
In this regard, some crypto KOLs have shared articles suggesting that the recent crypto market crash may be related to the California wildfire.
The Malibu area of Los Angeles is known for its concentration of wealthy individuals, including many globally renowned celebrities and entrepreneurs. However, facing the fierce onslaught of the wildfires, many have lost their homes in an instant. A significant portion of these affluent families hold assets in cryptocurrencies such as Bitcoin and Ethereum, which were previously considered an important component of their investment portfolios.
The head of a blockchain research institute in Los Angeles stated that the recent price fluctuations in the cryptocurrency market may be related to the massive sell-offs caused by the wildfires. Many affected families need to quickly liquidate assets to address rebuilding needs, and selling crypto assets has become the fastest way to do so.
The article also mentioned that Coinbase data shows a surge in Bitcoin trading volume from the Los Angeles and surrounding areas within a week of the wildfire outbreak, particularly in large transactions. Tech industry insiders revealed that the tech talent in Silicon Valley and Los Angeles have a relatively high investment proportion in cryptocurrencies, and the destructive impact of the wildfire has forced them to choose to cash out in the short term.
However, after verification by Dongjie, the above content is likely not true. First, we cannot confirm whether these victim families actually hold cryptocurrencies like Bitcoin. Additionally, if it's about liquidity, their cash in the bank has not been affected. Coinbase also did not announce any increase in trading volume in the Los Angeles area. It is more likely that this is a fake news story taking advantage of the background.
