A Brutal Week Across Every Asset Class
Over the past week, the S&P 500 and Nasdaq both recorded their largest single-day declines of the year so far. Bitcoin broke below $60,000 and is down roughly 15% for the week. Ethereum fared even worse, falling more than 24% over the same period and returning to levels we last saw in April.
US stocks, Korean stocks, crypto, gold and silver all fell together. When every risk asset drops at once, it is natural to ask where the capital is flowing. I see three main currents behind this move.
The Yen Carry Trade Unwinds
Think of the yen carry trade as a zero-interest credit card. For years, the Bank of Japan kept rates near zero, sometimes even negative. Large institutions borrowed yen cheaply, swapped it into dollars, and bought US stocks, bitcoin and other risk assets. They profited from the gap between Japanese borrowing costs and higher returns elsewhere.
Now the Bank of Japan is signaling higher rates. When borrowing costs rise, that trade stops working. Institutions do not wait around: they sell their dollar assets, convert the proceeds back into yen, and repay their loans. That is why we saw US stocks and bitcoin fall while the yen strengthened. This is simple arithmetic, not a forecast.
Cash Becomes the Only Shelter
Imagine a storm hitting your neighborhood. You do not go out to buy houses or stocks; you take shelter. The market did the same last week. The US added 172,000 jobs, far above expectations, and that changed the entire rate outlook. If the Federal Reserve is no longer expected to cut rates, and may even hike, then the cost of holding risk assets suddenly looks much higher.
Donald Trump posted that strong jobs numbers should make stocks rise, and that the Middle East was close to peace. The market ignored him and kept falling. Institutions were not looking for cheap entry points; they were reducing positions. In that environment, even gold could not hold up. Everyone wanted the same two things: dollar cash and short-term Treasury bills. Bitcoin could not help either.
Is Bitcoin Still Digital Gold?
This brings up the question everyone asks during a crash: if bitcoin is digital gold, why does everyone rush into dollars? I think the logic works the other way around. The dollar is the ultimate crisis safe haven because the entire global financial system is built on it. Settlement, debt, reserves, pricing: everything runs through the dollar.
When that system panics, the first reflex is not to jump outside it; it is to grab the most certain anchor inside it. That is dollar cash. This is not a bitcoin failure. Decentralized financial infrastructure has not yet reached the maturity needed to replace the dollar in a crisis. The issue is infrastructure maturity, not the narrative.
The IPO Liquidity Drain: SpaceX, Anthropic, OpenAI
The third force is less visible but just as powerful. SpaceX, Anthropic and OpenAI are all moving toward public listings. Institutional investors started repositioning well before the official subscription windows. They are trimming tech stock positions, taking profits, holding more dollar cash, and lowering ETF holdings to free up capital for these deals.
SpaceX alone is reportedly targeting $75 billion in fresh capital at a valuation around $1.75 trillion, with orders already nearly four times oversubscribed. Anthropic's latest private round reportedly valued it near $1 trillion, and OpenAI is also said to be targeting a trillion-dollar valuation. Combined, these offerings could suck hundreds of billions of dollars out of the market.
On top of that, the largest passive funds tracking the Nasdaq 100 and S&P 500 will be forced to buy these names once they enter the indexes. Those forced rebalancing flows happen on a compressed timeline and add another wave of mechanical pressure just as overall liquidity is already tight.
The SpaceX Trade Looks a Lot Like 2017 ICOs
SpaceX may be the marquee name, but look at the financials. The filing shows losses of $4.94 billion in 2025 and $4.28 billion in 2026. The prospectus itself says AI and other businesses require long-term heavy investment and will struggle to be profitable in the near term. Even Michael Burry has publicly questioned the valuation.
Yet the market seems ready to pay up. The logic is familiar: get an allocation, and someone else will pay a higher price later. This feels very similar to the 2017 ICO mania. Open any platform right now and you will see SpaceX and Elon Musk presented as the last chance for retail investors to achieve financial freedom. But how many of those investors actually read a prospectus? Very few. They are buying the story and the emotion, not the fundamentals.
I am not saying you should avoid SpaceX or that the market is wrong. I am asking a simpler question: when you buy an asset, are you investing in its future, or are you betting that someone else will pay more for it later? That distinction matters more than whether bitcoin is still digital gold.
Do Your Own Research Before You Call a Bottom
These three forces explain both where the money went and why the market fell. The yen carry trade unwound, forcing asset sales and yen buying. Risk aversion pushed capital into dollar cash and short-term Treasuries. The coming super IPOs drained liquidity and made institutions hoard even more cash.
Bull market gains can disappear quickly in a bear market. The only thing that lets you hold through volatility is a clear understanding of what you own. Do not let emotion or a good story make your decisions for you. Do your own research, and decide for yourself.