In early August 2024, a surprise Bank of Japan rate hike sharply strengthened the yen, forcing a rapid unwind of the popular yen-funded carry trade that had helped inflate risk assets worldwide. The resulting deleveraging hit global equities and crypto alike, with Bitcoin dropping hard on August 5 in a session traders quickly dubbed "crypto's Black Monday."
The move was brutal to trade because it originated entirely outside crypto — a macro/FX shock that most crypto-native traders weren't watching — and arrived as a fast, correlated risk-off cascade across asset classes simultaneously. Liquidations compounded the initial move, and the speed of the reversal the following days made both shorting the drop and buying the bottom dangerous.
Same engine, same hidden right-hand side — a different day's problem.