Core Viewpoint - The recent significant drop in Bitcoin's price, termed "Black Friday," was primarily driven by institutional sell-offs of Bitcoin ETFs, leading to a market panic and widespread liquidation of positions [1][4][26]. Group 1: Bitcoin Price Drop - On November 21, Bitcoin fell below $82,000, nearing the $80,000 mark, representing a 35% decline from its historical high of $126,000 on October 6 [1]. - Over a 24-hour period, the total liquidation across the network exceeded $1 billion, affecting hundreds of thousands of traders [1]. Group 2: Bitcoin ETF Explanation - Bitcoin ETFs allow investors to gain exposure to Bitcoin without holding the actual asset, functioning similarly to traditional ETFs [7][8]. - The approval of Bitcoin ETFs by U.S. regulators in January 2024 was influenced by a legal defeat for regulators against a crypto company and the involvement of major financial institutions like BlackRock [7][8]. Group 3: Institutional Selling - Institutions began to sell off Bitcoin ETFs in response to hawkish statements from the Federal Reserve, indicating a prolonged period of high interest rates [10][26]. - The sell-off was characterized as a risk-averse strategy, with institutions prioritizing the liquidation of high-beta assets like Bitcoin [21][22]. Group 4: Federal Reserve's Hawkish Stance - Federal Reserve Chairman Jerome Powell's remarks on November 20 emphasized the persistence of inflation and the unlikelihood of interest rate cuts, suggesting a new normal of high rates [11][12][14]. - The expectation of higher yields on new government bonds prompted institutions to sell off lower-yielding assets, including Bitcoin [15][17][26]. Group 5: Market Dynamics and Panic Selling - The initial institutional sell-off triggered a panic among retail investors, leading to a cascading effect of further sell-offs and forced liquidations [24][26]. - The phenomenon of panic selling is likened to a "domino effect," where the fear of loss drives more participants to exit the market [24][25]. Group 6: Broader Economic Implications - The actions of the Federal Reserve and the U.S. government reflect a complex relationship where the Fed aims to control inflation while the government seeks to stimulate economic growth [30][32]. - The situation illustrates the unpredictable nature of financial markets, where individual actions can lead to significant systemic outcomes [33].