The recent market movements indeed feel like a "big plunge." Bitcoin is falling, gold is dropping, and even the US stock market hasn't been spared. It seems as if global assets have suddenly lost their appeal, collectively heading downward.

Many people are puzzled—Japan just raised interest rates, so how does that affect the entire global market? Actually, it's not that complicated; it's simply a massive game of "capital flight."

**How 25 Years of "Zero Interest Rate Dividends" Created $4 Trillion**

Over the past quarter-century, the Bank of Japan has maintained near-zero or even negative interest rates. In plain terms, major international institutions and hedge funds can borrow yen without paying much. With such cheap funds, how could they not take advantage?

The strategy is straightforward: borrow yen → exchange for USD → buy high-yield assets like Bitcoin, US stocks, gold. As long as these assets are rising, with near-zero costs, the entire chain can keep running. Over more than two decades, this "free money" scheme has ballooned to nearly $4 trillion. Sounds crazy? But it’s happening.

**Policy Shift, the Game Rules Have Changed**

Now, the Bank of Japan is tightening. This signal has multiple implications—

First, the cost of borrowing yen is rising sharply. Previously near zero, now they have to pay real interest. Second, the yen may appreciate. Institutions that borrowed money and then need to repay in yen will face exchange rate losses. Under this double blow, international capital that has been playing this game for decades is panicking.

Their reaction? Not sitting down to analyze, but—selling. Offloading Bitcoin, US stocks quickly to buy back yen and repay debts. This isn’t market pessimism about these assets; it’s a collective forced liquidation.

**The Market Looks Crashing, But It’s Actually "Bleeding Out"**

The decline you see is fundamentally a reverse flow of that $4 trillion capital tide. When these funds flooded in, they supported asset prices; now, as they flow out, they push prices down. In the short term, the massive change on the supply side is too much for the market to absorb, so prices naturally give way.

In this scenario, volatility will be intense. But what you need to understand is—what’s truly changing isn’t the fundamentals of these assets, but the external capital environment. Bitcoin’s code hasn’t changed, the business models of listed US companies haven’t changed; it’s just that arbitrage funds can no longer access the cheap financing they used to.

**What’s Next**

In the short term, as long as the Bank of Japan continues to raise interest rates, this forced liquidation pressure will persist. But this isn’t an endless process. Once these arbitrage positions are closed and the market has absorbed this shock, a new equilibrium will gradually form. By then, new logic and opportunities may emerge.

Finally, I want to say—understanding the market isn’t about predicting rises or falls, but about seeing clearly what’s happening behind the scenes. This volatility isn’t arbitrary; it’s an inevitable result of a long-term change in game rules. Recognizing this clearly will help you face subsequent market movements with more composure.