Gold and silver surge again, what’s happening with digital gold BTC?

There are even greater risks behind this market crash. Everyone is focused on Trump’s tough words in Greenland or the threat of tariffs, but the real seismic source is in Japan. The 40-year Japanese government bond yield has directly broken through the 4% mark for the first time in decades. As the world’s largest creditor nation, if Japan’s long-term interest rates go out of control, it means the global liquidity valve is being forcibly tightened.

Why gold surges again
Denmark’s pension funds have started leading the sell-off of U.S. Treasuries, and European countries are beginning to discuss using their $10 trillion in U.S. assets as a capital weapon to counterattack. Gold has become the only zero-credit-risk asset in the eyes of global central banks and safe-haven investors.

Why Bitcoin has become a weak point
Bitcoin recently fell below $90,000, essentially because it is still regarded as a long-duration risk asset in the face of extreme liquidity crises. The surge in Japanese long-bond yields indicates that the world’s cheapest arbitrage capital pool is drying up. When those institutions engaged in yen arbitrage discover their backyard is on fire, their first move is to sell high-liquidity, high-volatility assets like cryptocurrencies.

Currently, Bitcoin is far from being able to replace gold as the flagship of defense. Its sensitivity to dollar liquidity even exceeds that of the Nasdaq. When VVIX moves before VIX, smart money is pricing this uncertainty in the options market. Bitcoin here is more like a liquidity pump than a safe haven.

How about the US stock market?
The current trend in the US stock market is also very dangerous. The S&P 500 has already wiped out its gains for the year, and the traditional “TACO ( seconds to kneel )” logic—where Trump would support the stock market for votes—appears very pale in the face of current credit risks.

The last line of defense is Davos in Switzerland. Trump is about to meet with European leaders there, and the market is betting on a Davos turnaround. If neither side makes any concessions on Greenland or tariffs, or if Europe actually initiates a larger-scale debt sell-off, then these declines we see now might just be the opening act of this wave of volatility.

What’s different about the two yen arbitrage unwindings?
Although both of these crashes are related to yen arbitrage unwinding, their underlying logic is different. In August 2024, it was due to the Bank of Japan’s rate hikes causing leveraged players to be forced to liquidate. While people were selling, they still believed U.S. Treasuries were safe, so funds moved into Treasuries, and yields were falling.

Now, U.S. Treasuries are also unstable, and the market is suspicious of any sovereign credit collateral. Unlike a flash crash that hits the bottom instantly, this will gradually erode market patience and liquidity.

Bitcoin falling below $90,000—if caused by long-term capital outflows driven by Japanese fund reflows—means we should be wary not just of short-term volatility, but of a downward shift in the entire crypto valuation system.