Analysis of yesterday's U.S. stock and crypto market crash: as expected, the crypto market continues its bearish trend. 1. Tightening market liquidity (main issue) - This is the fundamental reason for the U.S. stock market drop, reflected in the following aspects: - Government shutdown delaying federal spending: - The U.S. government shutdown lasted 44 days, delaying federal spending that was supposed to boost market liquidity, worsening the tight cash situation in the market. Increase in U.S. Treasury issuance: - The Treasury Department increased the issuance of U.S. bonds, pulling a large amount of cash out of the short-term market. - This reduced the funds in the banking system (i.e., reduced "reserves"). - Banks have less cash for loans, financing, and investments, further tightening market liquidity. Consequences of liquidity tightening: - Lack of liquidity triggers market volatility. - Weakens the Fed's ability to control the economy through interest rate policies.