Today the square is in an uproar - who is to blame for the big dump in the morning trading? Some say it's due to the encryption crackdown announcement from the University of Tokyo on the 29th, while others point to the Central Bank governor's statement on interest rate hikes.

To be honest, many people underestimate the destructive power of Japan's interest rate hikes. A lot of global funds are actually supported by the negative interest rate arbitrage of the yen—simply put, it means borrowing money at low interest rates from Japan and reinvesting it into markets with higher yields (including the cryptocurrency market). Now that the expectation of interest rate hikes has come, this funding chain can't hold up anymore.

As for that policy announcement? If it really had such a big impact, the market would have reacted immediately like it did in 2021, and it wouldn't have waited until Monday to experience a big dump. The timeline doesn't match up, friends.

So don't be misled by surface information; understanding the underlying logic of capital flow is key.