Cash is king, patience is gold. In an era of liquidity drought, the market is no longer about who makes the most money, but who can survive.

I watched the screen as Bitcoin once again fell below $100,000. This month's market performance has been quite embarrassing. The US government shutdown has lasted 37 days, setting a record, and at the same time, $700 billion in liquidity has been forcibly drained from the market.

Yesterday, a friend who just entered the market hurriedly came to ask, "Is the bull market over?" I didn't answer directly, but instead asked him, "Do you know why it fell?" He shook his head. Alright, today let's have a good discussion about what caused this decline and how to respond.

**The key is actually liquidity**

Don't think this drop is due to problems within cryptocurrencies themselves. The real issue is here — a large amount of liquidity is being drained.

The balance of the US Treasury General Account has now exceeded $1 trillion, a number we haven't seen since April 2021. This means that in just a few months, over $700 billion in cash has been forcibly pulled out of the market. Essentially, this is a form of de facto interest rate hike, which hits risk assets like Bitcoin the hardest.

The more direct reflection is in financing costs. The secured overnight financing rate soared to 4.22% on October 31, surpassing the Federal Reserve's excess reserve rate by 32 basis points — the highest since March 2020. The actual borrowing costs in the market haven't decreased accordingly; the Fed's rate cuts have been completely offset.

Once liquidity tightens, no risk asset can escape. Bitcoin has been...