Last night's big dump in the crypto market made many people's first reaction that domestic regulation had taken action again. Don't be quick to jump to conclusions - the real trigger this time was actually in Tokyo.

Bitcoin has slid directly from the high of ninety thousand to below eighty-three thousand, which indeed caught many off guard. There is a frenzy on social media about a joint meeting of 13 departments in a certain country, leading many to conclude that this is a policy crackdown. However, a brief review reveals that similar regulatory statements have appeared multiple times over the past few years; the market rises or falls as it pleases, and these do not truly shake its foundations.

The variable that is truly worth paying attention to is the sudden surge of Japan's 10-year government bond yield to the 1.8% mark. It is important to note that since the 2008 financial crisis, this figure has never reached such a high level. Why would this event trigger a chain reaction?

For the past decade, the Bank of Japan has maintained near-zero interest rates. This has created a massive arbitrage window: global capital can borrow yen at extremely low costs, then exchange it for dollars to invest in higher-yield assets—U.S. Treasuries, tech stocks, gold, and of course, Bitcoin. This yen arbitrage trade has become the infrastructure of the financial market, with large amounts of capital flowing into various risk assets. The entire system is built on the premise that 'borrowing yen costs almost nothing.'

But now this premise is starting to shake. Inflationary pressures within Japan continue to rise, and the central bank is facing pressure to raise interest rates. The market generally expects that the monetary policy meeting on December 19 will raise the interest rate from 0.5% to 0.75%. At the same time, the yen exchange rate is also strengthening, rising from the previous 150 yen to 1 dollar to over 140.

What does this mean? Those institutions that borrowed yen for arbitrage suddenly found their costs rising and the exchange rate moving against them. Therefore, they began to sell their assets to buy back yen to repay their debts. US stocks, US bonds, and gold are all being sold, while Bitcoin, due to its 24-hour trading and good liquidity, has become one of the easiest targets to cash out. This is not a technical breakdown, but rather a global passive deleveraging.

Some may wonder, isn't the Federal Reserve going to cut interest rates on December 10? The problem is that even if the Fed cuts by 25 basis points, while the dollar becomes relatively cheaper, the yen is simultaneously appreciating, further compressing the arbitrage space. It's like when you're patching a small wound, the artery on the other side bursts—emergency relief has very limited effect.

At this stage, it is necessary to remain rational. Institutional funds have already been actively withdrawing. If individual investors blindly try to catch the bottom, they are likely to encounter a continuation of the fall instead of a reversal opportunity. The market needs time to digest the impact of this round of tightening liquidity, and volatility may continue in the short term.