Bitcoin falls below 82,000 USD, you must know these 10 things

01 big dump: Bitcoin's “Black Friday”

For Bitcoin, last Friday was a true “Black Friday.”

On November 21, Bitcoin fell below the $82,000 mark and once approached the $80,000 threshold. Compared to the historical high of $126,000 set on October 6, it has dropped a full 35%. In the past 24 hours, the total amount of liquidations across the network exceeded an astonishing $1 billion. Hundreds of thousands of traders lost everything in this big dump.

Oh my. 1 billion dollars.

Although it's normal for Bitcoin to experience ups and downs, why is this time so fierce and sudden?

I'll try to help you sort it out.

This needs to start from the direct cause of the big dump:

Professional institutions have sold off a large amount of their Bitcoin ETFs.

02 Bitcoin ETF: A “pork ticket” for one Bitcoin

What is a “Bitcoin ETF”?

You want to invest in pork. Because you think the price of pork will rise.

But in the past, you had to raise pigs yourself. It was time-consuming, labor-intensive, and risky. However, now a trust company has emerged. They bought 1 million pigs and placed them in a professional pigpen. Then, they divided the ownership of these 1 million pigs into 100 million “pork tickets” and listed these tickets for trading on the stock exchange. So, you only need to open a stock account to buy “pork tickets” just like buying and selling stocks. Or you can give it another name, called “pork ETF.”

That's right, this “pork ticket” is an ETF. Its full name is Exchange-Traded Fund.

The so-called Bitcoin ETF is a “Bitcoin ticket”. It allows you to enjoy the gains and losses that come with following the rise and fall of Bitcoin without holding actual Bitcoin.

In January 2024, it was finally officially approved by the American regulatory authorities. Why was it approved? There are many reasons. But the direct reason for the approval was that the regulators lost to the crypto company in a key lawsuit. At the same time, Wall Street financial giant BlackRock also took the lead in applying. Ultimately, the regulators had no choice but to open the floodgates.

From now on, not only gold and oil have ETFs. Bitcoin also has ETFs.

However, although ETFs do not change the attributes of Bitcoin, they completely change the way of entering and exiting.

On one hand, it is a “super entry channel.” A large amount of funds can easily flow in. On the other hand, it is also a “super exit channel.” These funds can withdraw from the battlefield at an unprecedented speed, like lightning.

So, why are professional institutions suddenly dumping Bitcoin ETFs and swiftly withdrawing from the battlefield?

It is because they heard a series of “hawkish remarks” from the Federal Reserve.

03 Hawkish remarks: Don't think about it, there will absolutely be no rate cut.

What hawkish remarks?

Give a recent example.

On November 20, 2025, the day before the big dump, Federal Reserve Chairman Powell delivered a speech. Let's first take a look at his original words.

Although we acknowledge that some progress has been made, the inflation rate remains stubbornly above our 2% target. Announcing victory now, or beginning to speculate on the timing of interest rate cuts, is extremely immature. We are fully prepared to maintain a tight policy stance—specifically, to keep interest rates “at higher levels for a longer period”—until we are confident that the task of combating inflation is truly complete.

This speech contains a lot of key information. For example, inflation remains stubborn; for example, speculating on interest rate cuts now is extremely immature; for example, keeping interest rates “at a higher level for a longer time.”

Translated, it means, “Stop dreaming, the problem is more serious than you think”; “Your previous expectations about interest rate cuts in December are completely wrong and wishful thinking. I officially deny it”; “The high interest rate environment will become the new normal in the future, not temporary. The party is over.”

But if we were to summarize it into a core conclusion, it would actually be one sentence.

“I can tell you right now that we will not cut interest rates.”

But what does not lowering interest rates have to do with institutional sell-offs?

Because Powell's speech is equivalent to telling the market that the “new bonds” of U.S. Treasury will have higher interest rates.

04 New bond interest rates: the “official guide price” of money

Why? Why will there be higher new bond yields if interest rates are not lowered?

You can think of the financial market as a “supermarket of money.”

The Federal Reserve is the general manager of this supermarket. In his hands, there is a special counter called the official risk-free wealth management counter. Not lowering interest rates is equivalent to the general manager shouting with a loudspeaker, “My official counter will continue to offer an annual interest rate of 5.5%. And it is zero risk.”

This 5.5% is the “official guide price” of the entire money supermarket.

Now, as a vendor, the U.S. government needs to issue a batch of new promissory notes, that is, new national debt, to borrow money from customers. So, can it offer a 3% interest? No. Because customers would think, am I crazy? Then why wouldn't I just deposit my money at the general manager's counter with an annual interest of 5.5%?

That's right, the effect of the official guide price is that any bond that is “more expensive” (with a lower interest rate) than it cannot be sold.

Therefore, in order to really borrow money, the new bonds issued by the U.S. government must align with the official interest rate of the Federal Reserve. It may even be higher, for example, 6%.

This is the causal relationship between “no interest rate cut” and “new bond rates will be high.”

However, this new bond is, after all, a matter for the future. It hasn't been issued yet. So why are the institutions starting to sell off now?

Because everyone knows that as soon as this “expectation” appears, the prices of assets will start to big dump.

05 Expectation: The market will adapt “yield” by means of “fall in price”.

Why is this?

Because no one is a fool. When higher yielding assets are about to emerge and interest rates cannot be changed, lower yielding assets will increase their yield by means of “falling in price.”

It's like you spend 2 million to buy a house. The annual rent is 100,000. My rental yield is 5%. If the rent cannot change and the price falls by half to 1 million, the rental yield will immediately double to 10%, and perhaps someone will be willing to buy it.

Similarly, when it is anticipated that there will be new bonds with an interest rate of 6% in the future, many people will sell off their old bonds which only have an interest rate of 3%. The old bonds will be heavily sold, causing their prices to fall.

When will it fall? The details are very complex. But generally speaking, the price of old debt will continue to fall until its yield rises to basically match the expected yield of new debt, and the market finds a new balance.

So, it's time to sell now. Because there are good prices only now.

Moreover, it's not just about getting rid of old debts; high Beta assets like Bitcoin must be sold off quickly.

06 High Beta Assets: The “volatile” assets that everyone wants to throw away.

What is a “high Beta asset”?

You can think of Beta as an indicator that measures the “volatility of an asset's temperament.”

If you consider the Beta value of the entire market to be 1, it's like an ordinary family sedan. Those assets with particularly high Beta values are like F1 racing cars. On sunny days (Risk-On), many people prefer to drive racing cars because they have the potential for excess returns. But on rainy days (Risk-Off), many people enter risk-averse mode, selling off the easily uncontrollable racing cars and switching back to the safer family sedan.

Bitcoin is a typical high Beta asset. Therefore, it should be prioritized for selling. Even large-scale selling is advisable. Data shows that in the weeks leading up to November 21, there was a continuous net outflow of funds from the U.S. spot Bitcoin ETF for five consecutive weeks, with a total sell-off amounting to as much as $2.6 billion.

Alright. So it was to hedge against risks that institutions sold off these assets. But why did it trigger a collapse that led to the liquidation of hundreds of thousands of people?

Due to the actions of institutions, a panic sell-off was triggered.

07 Panic selling: boulders rolling down, crowds fleeing, chain explosions

What is “panic selling”?

At the beginning, it was a boulder rolling down.

As the main force, even rational selling by institutions is equivalent to pushing a huge rock down from the peak. The balance of buying and selling in the market is disrupted. Prices begin to experience the first wave of decline.

Then, the crowd dispersed.

Thousands of retail investors, seeing the rolling boulder, can easily be dominated by fear and start to sell off. Because even large institutions are running away, if they don't run now, it will be too late. As a result, the scale of the sell-off begins to expand, and the price falls at an accelerated rate.

Finally, a series of explosions.

The accelerated fall in prices triggered the “forced liquidation” of leveraged trading, also known as liquidation. Subsequently, it spiraled downwards. Prices fell, triggering liquidations. Liquidations further drove down prices. Driving down prices triggered more liquidations…

In the world of investing, what runs faster than greed is fear. What runs faster than fear is computer programs.

So, why did Bitcoin experience a big dump?

This is because the hawkish remarks from the Federal Reserve have made new bonds very attractive. To hedge against risks, institutions prioritized selling off high-risk Bitcoin while simultaneously selling off old bonds. The large-scale sell-off of Bitcoin ultimately triggered panic and a market crash.

Yes. Essentially, this is about taking advantage of the U.S. government.

08 Shearing the American government's wool: Capital has no faith, only flow.

What is “shearing the wool of the U.S. government”?

Let me tell you an interesting story.

In order to rectify the traffic order in the city (to combat inflation), the police chief (Federal Reserve) ordered that the vault of the downtown bank (U.S. government) must remain open 24 hours a day. Anyone who wants to take money can go directly inside.

The bank president is not happy. But there's nothing they can do but comply.

And Xiao Wang, originally driving a modified racing car (Bitcoin), was ready to go on an adventure. As soon as he heard that the door was not locked, he immediately sold the racing car and ran to that zero-risk bank, encouraged by the police chief, to take the money that was guaranteed to be profitable.

This is called “sheep shearing.”

Specifically, it means selling high-risk assets like Bitcoin and using the money to buy U.S. government bonds, which are ultimately paid for by taxpayers, and have a relatively high interest rate with no risk.

Capital has no faith, only flow.

And the big dump of Bitcoin has once again proven this point.

But this is too absurd. The Federal Reserve, why would it go against the U.S. government?

Because they have their own duties.

09 Throttle and Brake: Ensure the classic car doesn't fall apart

The US government and the Federal Reserve are like the “accelerator” and “brake” in a car.

The U.S. government (Treasury) is the accelerator. Its task is to spend money, borrow money, and stimulate the economy. Therefore, it hopes that the interest on borrowed money is as low as possible.

The Federal Reserve is the brake. Its task is to maintain price stability (control inflation) and achieve maximum employment. To prevent the engine from overheating (inflation) due to excessive speed, it sometimes applies the brakes (raises interest rates or maintains high rates). Although many times, this can make those who are pressing the accelerator feel very uncomfortable.

This system design that takes the brakes away from politicians is called “central bank independence.” The purpose is to prevent a greater disaster, namely, hyperinflation. Historically, there have been countless governments that, after gaining control of the printing press, printed money wildly, ultimately leading to economic collapse.

So, it seems that they are at odds. But their ultimate goal is the same: to ensure that this over 200-year-old classic car in the United States doesn't fall apart.

10 Complex Systems: Never Anthropomorphize the System

Alright. Back to Bitcoin.

So, will Bitcoin continue to fall, or will it迎来上涨?

It's hard to say.

But so far, perhaps what we should learn from this is “Don't anthropomorphize the system.”

Some people say that this crash is a conspiracy by certain speculators, that some bad people are doing evil.

I don't know if there are any. But I want to believe that this is the result of countless individuals within the system, such as the Federal Reserve, the U.S. government, institutions, and retail investors, making choices that they at least think are beneficial under their respective rules and motivations. And these choices come together to finally create the situation we see today.

So, do not try to find enemies in the system, but instead strive to find patterns within the system.

Then, you can have a clearer understanding than others.

Even see the direction of the tide.