Analysis: The "1011" clearing event and the increasingly difficult macro environment have become the main reasons for the recent decline

Bitcoin and Ethereum have erased all gains for the year—this is a sharp turnaround for a market that witnessed Bitcoin soar to a historic high of $126,000 just two months ago. VCs point out that there are two main reasons behind this round of correction: the liquidation event on October 11 and an increasingly difficult macro environment.

Rob Hadick, a general partner at Dragonfly, stated that this deleveraging event, triggered by low liquidity, poor risk management, and weak oracle or leverage mechanisms, has caused significant losses and brought about tremendous uncertainty.

Boris Revsin, a general partner and managing director at Tribe Capital, shares the same view, calling it a "leverage wash" that has created a ripple effect throughout the market. Meanwhile, the macro environment has also become less friendly: expectations for short-term interest rate cuts have faded, inflation remains stubborn, the job market is weakening, geopolitical risks are rising, and consumer pressures are increasing. VCs note that this series of factors has led to weak performance in most risk assets over the past two months.

Anirudh Pai, a partner at Robot Ventures, further emphasized concerns about a slowdown in the U.S. economy. Key growth indicators—including the Citigroup Economic Surprise Index and the 1-year inflation swap (a derivative used to hedge against inflation risk)—have begun to weaken. Pai noted that this pattern has also appeared before previous recession concerns, driving broader risk-averse sentiment.

Dan Matuszewski, co-founder of CMS Holdings, stated that aside from tokens supported by buyback mechanisms, the crypto market has seen almost no "incremental capital inflow," except for DAT (Digital Asset Treasury) companies. With new demand drying up and ETF inflows no longer providing effective support, price declines have accelerated.