2025-12-09 23:49:26

On December 2, it was as if the entire crypto world had hit the crash button.

Bitcoin took the lead with a nosedive, plunging straight through the $84,000 mark with a 24-hour drop of over 8%. Even worse was the total liquidations across the network—$974 million wiped out, with accounts for over 260,000 people going to zero; long positions alone accounted for $851 million of the liquidations. Even veteran traders were left shaken by this bloodbath.

As for the culprit? Clues point to the Bank of Japan. They suddenly hinted at a possible rate hike in December, instantly sending the USD/JPY exchange rate swinging wildly between 155 and 160—a clear signal of tightening liquidity. A Threshold Network co-founder put it bluntly: this move pulled the rug out from under risk assets, unsettling their very foundation.

When it rains, it pours. Strategy Company, due to Bitcoin’s weak price, sparked rumors that they might have to sell Bitcoin to pay dividends. Fortunately, the company responded quickly, issuing a statement saying they had already prepared $1.44 billion in reserves (from selling Class A shares) and would ensure at least 12 months of dividend payments, aiming for a cash buffer of more than 24 months. That helped to ease some of the panic.

But then stablecoins ran into trouble. S&P downgraded Tether’s USDT, citing concerns that further Bitcoin declines could leave its collateral insufficient. Arthur Hayes was even more direct: “If gold and BTC holdings drop 30%, USDT will be insolvent.” However, Tether’s CEO immediately fired back, saying the group’s equity alone is close to $30 billion, and S&P didn’t account for additional equity or profits from U.S. Treasury yields.

Bottom line: the whole macro environment is off. A short-term rate cut? Forget it. Inflation remains stubbornly high, the job market is weakening, geopolitical risks could explode at any moment, and consumers are under tremendous pressure—the performance of risk assets over the past two months says it all. As the founder of Cardiff put it bluntly: the Fed meeting is just around the corner, inflation data is still unclear, and institutional investors are frantically reducing risk exposure. Who would dare touch a highly volatile asset like Bitcoin right now? If Powell makes another hawkish statement, wouldn’t that trigger another round of hits?

This early December crypto storm has exposed every vulnerable link in the market.

BTC0,29%

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StakeOrRegret

· 2025-12-10 00:10

Another damn bloodbath, $974 million gone just like that. Is this the risk I was talking about? Institutions are really pulling out, who wants to get dumped on? There's trouble with USDT, and now with the S&P downgrade, it's a real problem...

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LongTermDreamer

· 2025-12-09 23:52

Another bloodbath again, but this is just the three-year cycle theory. Looking back, these are all buying opportunities. --- USDT risk? Don’t be ridiculous, the historical data is there—every scare has turned out to be a false alarm. --- This move by the Bank of Japan was written in the cycle long ago, just have patience and wait. --- 260,000 liquidations are truly brutal, but what does that show? Institutions are accumulating. --- What nonsense is S&P rating? Tether has its own equity—this is just panic before the flush-out. --- I’m tired of hearing Powell talk, but Bitcoin will still go up anyway. --- No chance of a rate cut in the short term, but over three years, this drop is nothing. History will prove it. --- To put it plainly, this is just a shakeout. Only those without conviction are being washed out. Long-term holding is the way to go.

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