I’ve been thinking a lot lately about why this round of crypto market crash is so fierce. On the surface, it looks like it’s driven by buy-and-sell pressure, but the deeper political and economic factors are the real culprits. After sorting it out, I’ve found at least five key factors that are hitting at the same time.

First, let’s talk about the trade war. The tariff policies Trump rolled out after taking office directly impacted global markets. By imposing additional tariffs on other countries, the U.S. caused inflation to surge in those countries, and the cost of living skyrocketed. This macro pressure flows straight into the crypto market, driving traders into extreme panic—seeing any hint of wind or grass, they start selling, smashing crypto assets into fiat currency. U.S.-Europe relations have also been tight recently. The Greenland incident has been all over the news; even though it seems to have eased on the surface, the shadow of potential conflict has been hanging over the market all along.

Another issue is the problem of liquidity drying up. In the October 10 crash, Bitcoin was directly hammered from 120,000 (ten-thousand-dollar units) down to 80,000, and it’s now stabilized around 78,000. But what’s really terrible is that a large number of altcoins have fallen to new historical lows—there hasn’t been any rebound from their prior peaks. I even saw MicroStrategy’s founder stop buying Bitcoin. This guy used to be an important driver behind Bitcoin rising to 120,000. Now, market liquidity is extremely scarce. KDA was the first to announce bankruptcy and exit, and there are surely many projects that will follow suit. In the Ethereum ecosystem, most projects have made new lows, and projects on the Bitcoin network have basically gone silent. The whole market is now barely getting by on those altcoins that still have a bit of liquidity, with no new projects coming in.

Platform security incidents are also amplifying the panic. A major top exchange was hacked in the first quarter of this year. Although a later large exchange stepped in to rescue the situation, that incident still scared everyone. When Bitcoin surged to 123,000 and then suddenly crashed, the market simply couldn’t find enough buying power to take the sell-off. In that situation, nobody dared to buy the dip.

The U.S. government shutdown for those 43 days was really the last straw that broke the camel’s back. Federal employees went without pay, and ordinary people had to sell crypto assets just to survive—some even sold gold. Now there are rumors of another shutdown again. If it really happens once more, Bitcoin could fall back into the 70,000–90,000 range. Then a large batch of projects would announce bankruptcy, and more tokens would be delisted by exchanges.

Another factor that’s easy to overlook is gold. Although Bitcoin is dubbed “digital gold,” real gold and silver have risen sharply in the past two years, and the gold price has already surged to $5,110 per ounce. Ironically, the rising gold price is actually drawing blood from the crypto market. A reverse correlation has formed: when the gold price rises, Bitcoin falls—and vice versa. Ongoing uncertainty in the Middle East continues to push up gold prices. Issues involving Iran, Israel, and the U.S. nuclear reactor problem could trigger conflict. If fighting really breaks out, gold could even spike to $6,000 per ounce.

To be honest, this crypto market crash isn’t caused by a single factor. It’s the result of multiple pressures—macro political and economic factors, market liquidity issues, platform risks, and geopolitical tensions—all crashing down on the market at the same time. Market sentiment is now extremely pessimistic, and how much room there is for a rebound depends on whether these external factors can ease. In the short term, I don’t think things look good—I expect it may continue to face pressure for a while.