The secret behind the decline of cryptocurrencies and stocks is not Jackson Hole.. but $400 billion. The Bitcoin index has dropped more than 8% to reach $113,500 since it touched record levels above $124,000 last Thursday. Prices of other major cryptocurrencies such as Ethereum (ETH), XRP, and Solana (SOL) have also corrected, pulling the broader market downwards. The CoinDesk index has lost 13% of its value since last Thursday. The upward momentum has also weakened on Wall Street, where the tech-heavy Nasdaq index fell by about 1.40% to $23,384 on Tuesday, after hitting a record high of $23,969 a week ago.

Most market commentators attributed the losses on Wall Street and in cryptocurrency markets to investors shying away from risk ahead of Federal Reserve Chairman Jerome Powell's speech scheduled at the Jackson Hole event this week.

The prevailing view is that persistent inflation data may prevent Powell from meeting the market's dovish expectations (monetary easing and a shift to cuts). However, David Dong argues that the underlying driver of the sell-off is the fear of liquidity being drained from the U.S. Treasury General Account (TGA), which is a checking account held at the Federal Reserve and is set for a significant rebuild.$BTC