Today the market experienced a big dump, and many people are probably in shock— the Fed didn't say anything about not cutting interest rates, nor did any pro come out to speak negatively about Bitcoin, so why did it fall like this?

The answer lies across the Pacific: Japan. More precisely, this is a market crash triggered by "debt collection."

The trigger for the situation was that Japanese government bond yields surged to 1.01%, the highest level in 17 years. With yields soaring like this, it is unreasonable for the Bank of Japan not to raise interest rates – if they don't, the yen might really collapse.

The question arises: why is there such panic among global financial institutions when Japan raises interest rates?

It all starts with "Yen arbitrage trading." Over the past few years, the yen interest rate has been so low that it's almost free, and various capital pros have been crazily borrowing yen to buy high-risk assets—U.S. stocks, tech stocks, cryptocurrencies, whatever offers high returns. After all, borrowing costs are close to zero, and even if the risks are a bit higher, the yields are still enticing enough.

But now the attitude of the Bank of Japan has changed: "Interest rates will be raised, and you must pay back the money you borrowed, and the interest won't be low."

This is troublesome. Those institutions that leveraged to the max suddenly find that the cost of continuing to hold these assets has skyrocketed, and they might not even be able to pay the interest. What to do? They can only cut losses, sell assets, and exchange for yen to repay debts.

Thus, we have today's situation - it's not that there is a problem with the market fundamentals, but that someone is eager to "pay back" and is forced to sell off their cryptocurrency.