Let's talk in simple terms about why the Japanese yen interest rate hike has such a big impact.

It's not an exaggeration to say that the money in the cryptocurrency world might all be from Japan. Why do I say this? Let's take last year's bull market as an example.

Before this interest rate cut cycle, the interest rate for the yen was 0.25%, while the dollar was 5%. So many institutions and market makers borrowed from Japan, then bought U.S. bonds, and used those bonds as collateral to invest in other industries. This way, they could make nearly 4.75% profit without any capital at risk.

As long as the leverage on loans is high enough, this is a business with no capital and huge profits, leading to explosive growth in U.S. stocks, cryptocurrencies, and gold. A significant portion of the liquidity supporting all three comes from this. Because the more liquid money there is, the more profit from interest rate differentials can be generated.

Why is the A-shares market so stagnant? Because there are no such arbitrage opportunities providing massive liquidity to support it.

Now, with the yen interest rate hike and the dollar interest rate cut, it means that this capital frenzy lasting for over a decade is officially starting to decline. It also means that the massive liquidity in gold, U.S. stocks, and the cryptocurrency market will be drained.

If Trump cannot pressure Takamatsu to change this interest rate hike policy, the myth of U.S. stocks is basically going to start collapsing.

My personal guess: This might be the Japanese government's retaliatory action against the U.S. government for not supporting Japan's stance on the Taiwan issue. Japan itself knows that it has been drained by the U.S. economy over the years; it just dared not speak out after paying the protection fee. Now that the big brother is no longer providing protection, it's going to rebel. Long brother might be considering the instability this consequence could bring to the cryptocurrency market, so he has tightened regulations, making the entry and exit of funds very strict, and then the miners in Xinjiang are all gone, forcing miners to sell Bitcoin at a loss to survive and escape, also ruining Trump's plan to tokenize U.S. debt through the cryptocurrency market.