Discussions following the sharp decline in the crypto market last week indicate that this is not a crypto crisis similar to the scandals of 2022, but rather a macro event triggered entirely by traditional finance.

Panel members speaking at Consensus Hong Kong 2026 emphasized that the primary trigger was the unwinding of the yen carry trade transactions. Explaining the mechanism, Thomas Restout, CEO of B2C2 Group, said that investors borrowed yen at low interest rates and directed these funds into higher-yielding assets such as Bitcoin, Ether, and precious metals. When yen interest rates rose, these trades reversed, leading to a broad sell-off in the market.

Fabio Frontini, founder of Abraxas Capital Management, highlighted the link between TradFi and crypto by saying, "Everything is interconnected now." In addition to the opening of carry trades, increasing volatility triggered higher collateral requirements. Collateral ratios for metals increased from 11% to 16%, forcing some players to close their positions.

Bitcoin ETFs experienced heavy trading during the downturn. These funds, which had about $150 billion in assets at their peak, still hold around $100 billion. Since October, net outflows have totaled approximately $12 billion—significant, but not a full-scale institutional capitulation. According to Restout, this indicates a rotation of funds into other investments.

From a forward-looking perspective, Emma Lovett, Market DLT Credit Leader at J.P. Morgan, stated that 2025 will be a regulatory milestone. A more permissive US environment is accelerating the adoption of public blockchains and stablecoin-based settlement solutions. By 2026, a deeper integration of TradFi and crypto infrastructure is likely to be observed.