Bitcoin big dump breaks 84000 USD: Expectations of interest rate hikes by the Central Bank trigger 260,000 people Get Liquidated

On December 2, Bitcoin suddenly plummeted, breaking through the $84,000 mark, with a fall of over 8%. The total market capitalization of the crypto market directly fell below the $3 trillion threshold.

The worst is yet to come. In the past 24 hours, the total liquidation amount across the network reached 974 million USD, with long positions buried at 851 million. Over 260,000 people have been directly wiped out. This is a complete massacre of the long positions.

Arthur Hayes quickly pointed out the true culprit: the Bank of Japan hinted at a possible interest rate hike in December. The USD/JPY has been fluctuating between the 155-160 range, indicating that the Bank of Japan is serious this time. Threshold Network co-founder Maclane Wilkison also agrees with this assessment, “The Bank of Japan has released a signal for rate hikes, and global liquidity expectations are immediately tightening, making it difficult for risk assets to withstand.”

At the same time, the story of Strategy has also taken a turn. CEO Phong Le stated that they would only consider selling coins if the stock price falls below the net asset value and they cannot raise new funds. The market has begun to worry about a question - if Bitcoin continues to weaken, will Strategy be forced to sell off Bitcoin due to lack of cash to pay dividends?

USDT was not spared either. S&P Global Ratings downgraded Tether's USDT stability rating from “limited” to “weak,” citing that the fall in Bitcoin prices could lead to insufficient collateral. Arthur Hayes did the math: if the “gold + BTC position” falls by 30%, Tether's equity capital would be gone, and USDT would theoretically be insolvent.

Tether CEO Paolo Ardoino immediately jumped out to refute: the group's own equity is close to $30 billion, and S&P did not take this part into account, nor did it account for the basic profit of $500 million that can be earned monthly just from U.S. Treasury yields.

Boris Revsin, Managing Director of Tribe Capital, defined this plummet as a “leveraged washout,” triggering a chain reaction throughout the entire market. But the problem doesn't stop there. The macro environment is also deteriorating: short-term interest rate cut expectations have been dashed, inflation remains stubborn, the job market is weak, geopolitical risks are rising, and consumer pressure is increasing. This series of factors has led to weak performance among most risk assets over the past two months.

William Stern, the founder of Cardiff, put it more bluntly: “With just over a week until the Federal Reserve meeting and unclear inflation data, institutions are frantically reducing their risk exposure. No one wants to hold onto volatile assets like Bitcoin before Powell makes hawkish remarks.”