The decision of the Bank of Japan has triggered global financial turmoil, and the Crypto Assets market has suffered heavy losses.

Recently, the global financial market has suffered multiple blows, spreading to the Crypto Assets sector and causing a significant market decline. This turmoil originating from the TradFi market ultimately led to a big dump of Crypto Assets, highlighting the increasingly close connection between digital assets and the traditional financial system.

The cause of the event can be traced back to an unexpected decision by the Bank of Japan. The Bank of Japan suddenly announced interest rate hikes and balance sheet reduction, breaking the balance of global carry trades and triggering a chain reaction. The yen exchange rate subsequently rose sharply, forcing global investors to close their positions and sell various assets, including stocks, to repay yen-denominated debts. This change had a severe impact on the US stock market, leading to a significant fall in US stocks.

At the same time, the US economy is also facing the threat of recession. The latest non-farm employment data was far below expectations, with the unemployment rate rising to 4.3%, deepening market concerns about the economic outlook. The lackluster financial reports released by tech giants have only made matters worse, further undermining investor confidence.

Driven by this global risk aversion sentiment, the Crypto Assets market has also been affected. As a representative of high-risk assets, Bitcoin was hit the hardest, with its price falling by more than 20% in a short period, briefly dropping below the $50,000 mark. Other mainstream Crypto Assets, such as Ethereum, also experienced significant declines, resulting in a bleak outlook for the entire market.

Analysts point out that this big dump of Crypto Assets fully illustrates the close connection between the digital asset market and the TradFi market. Although Crypto Assets are often seen as a tool to hedge against inflation and the risks of traditional finance, they still find it difficult to stand alone in the face of global liquidity tightening and risk-averse sentiment.

In addition, the recent continued pressure from U.S. regulators on the Crypto Assets industry has also intensified the market's selling spree to a certain extent. The uncertainty of regulation combined with the turmoil in the global macro economy has further exacerbated investors' panic sentiment.

The financial storm triggered by Japan, which has affected the world and ultimately spread to the crypto market, may become an important turning point in the global financial landscape of 2024. It not only exposes the vulnerability of the global financial markets but also highlights the increasingly close connections between the Crypto Assets market and the TradFi system.

For investors, this is undoubtedly a severe test and an important warning. When making investment decisions, it is essential to fully consider the interconnectivity of the global economy, including traditional financial markets and the emerging crypto assets market. In this uncertain market environment, remaining vigilant and flexibly adjusting strategies will be key to managing risks.

In the future, the market will continue to closely monitor the policy directions of central banks in various countries, the global economic recovery situation, and the developments in Crypto Assets regulation. This financial storm that spans both TradFi and emerging markets may redefine the global asset allocation landscape, and investors need to view market changes with a more comprehensive and prudent perspective.