BTC fell from over 90,000 dollars to 85,000, and many people's first reaction is that it's the fault of the domestic joint crackdown policy. But to be honest, this kind of regulation has been called out for so many years, and the coin price rises when it should. This time, it really isn't their fault.

The real culprit is actually across the Pacific — the yield on Japan's 10-year government bonds suddenly jumped to 1.1%. Don't underestimate this number; the last time we saw it was during the 2008 subprime mortgage crisis, which is a big signal.

Why is this so critical? The reasoning is actually quite simple. For the past decade or so, the Bank of Japan has essentially been the world's most generous "ATM", with interest rates low enough to be negligible. Those folks on Wall Street have long mastered this trick: borrowing yen at nearly zero cost, converting it into dollars, and buying up everything around the world - profiting from the interest spread on U.S. Treasury bonds, chasing hot stocks, and certainly not missing out on high-volatility assets like BTC. After all, borrowing money is free; the crazy rise in the crypto market in the past few years has been largely fueled by this influx of capital.

The wind has changed now. Domestic inflation in Japan is squeezing the central bank, and the signs of a policy shift are becoming more pronounced, with the market betting on a rate hike in December. This directly strikes at the lifeblood of arbitrage trading—borrowing costs are soaring, profit margins have been cut by more than half, and with the possibility of the yen appreciating, institutions holding dollar assets will also suffer from exchange rate losses.

Under the pressure from both sides, what can those institutions do? They can only madly sell off their assets to exchange for yen to stem the losses. As a high-risk asset, BTC naturally becomes the first to be sold off. This is the real scenario behind this wave of plummet.