"Hurry and clear your positions! With the yen's interest rate hike, Bitcoin is going to crash below 80,000!" Yesterday, I was flooded with such news in my backend, and even my mom sent me a WeChat asking, 'Should I transfer the coins in my digital wallet out?'
At this critical juncture in 2025, the Federal Reserve's interest rate cut of 25 basis points has just landed, and the Bank of Japan's interest rate hike is causing a tremendous uproar. Financial media are collectively ecstatic, with headlines more shocking than the last, as if the global financial market is about to reenact a scene from the 'Titanic' at any moment.
As someone who has been in the crypto space for 8 years, witnessed 3 bull and bear markets, and avoided the 2022 Luna collapse, let me be honest today: the so-called 'interest rate hike triggering a storm' is merely blowing a mosquito into an elephant, and those who create anxiety are more terrifying than the market itself.
First, let's expose the truth: the "killing power" of the yen interest rate hike has long been calculated by the market.
Why is everyone afraid of the yen interest rate hike? The core concern is about "carry trade unwinding." For decades, institutions have loved to borrow yen at low interest rates to buy high-yield assets like Bitcoin and US stocks. Once the yen interest rate rises, borrowing costs increase, leading to asset sales to repay yen, putting downward pressure on prices.
But this wave of panic made two fatal mistakes, let's speak with data:
First, "expectations have already been priced in." The market is now speculating that the Bank of Japan will raise interest rates from 0.5% to 0.75%, but this news didn't just emerge yesterday; in November, Japanese government bond yields rose to a thirty-year high, and institutions have already started to slowly adjust their positions. It's like seeing lightning before thunder; when it finally rains, those seeking shelter have long been under the eaves. The reason for the sharp drop during the rate hike in July 2024 was that no one had predicted it in advance; this time, it is completely "on the table."
Second, the Fed's interest rate cut is "hedging" liquidity. On one side, Japan may tighten its purse strings, while on the other side, the Fed has just released a "big gift" of 40 billion dollars for bond purchases. After the dollar interest rate cuts, the returns on holding cash decrease, and institutions are more willing to invest money in inflation-resistant assets like Bitcoin. CFTC data shows that in the past two weeks, whales like Grayscale and MicroStrategy have been increasing their positions, with the latter alone buying more than 10,000 Bitcoins at an average cost of 90,000. If they were really afraid of a crash, would they be willing to buy at this price?
Interestingly, the yen exchange rate against the dollar is now 156, slightly stronger than 157 at the end of November, and there is no sign of "capital crazily flowing back to Japan." Those bloggers shouting about a "storm coming" probably haven't even checked the latest exchange rate data.
Practical tips: Ordinary people don't need to panic; just focus on these three signals.
No matter how complicated the macro policies are, when they fall on us small retail investors, the operational logic is actually very simple. Don't guess whether the Bank of Japan will raise interest rates; focus on these three "indicators," which are more useful than reading a hundred analysis reports:
1. Bitcoin's "support level" is more reliable than news. Bitcoin is currently oscillating in the range of 90,000-92,000, and this position is the recent accumulation cost line for the whales. If there is indeed panic selling, dropping below 88,000 could actually provide opportunities to accumulate in batches. If institutions dare to buy at 90,000, why should we small investors be afraid? But if it falls below 85,000 and cannot recover, then consider reducing positions; that's the bottom line.
2. The "opportunity window" for Ethereum is opening. The Fed's interest rate cut is a double benefit for Ethereum: first, liquidity easing will increase the borrowing demand in DeFi, and second, the ETH/BTC ratio is now only 0.035, at a historical low. Xiaomi is about to pre-install Web3 applications on new devices, and by then, users of the Ethereum ecosystem will come in large numbers. Positioning now is equivalent to buying Bitcoin in 2019, earning the double dividends of "user growth + macro easing."
3. Stay away from "small coins riding on hot trends." Every time there is a macro shift, small coins will rally and tell stories about how they "can resist inflation" and "are not affected by interest rate hikes." Remember, during such times, only top assets like Bitcoin and Ethereum, which have institutional backing, can withstand volatility; small coins drop faster than anyone else. Don't be a bag holder.
Lastly, let me say something from the heart: don't be misled by noise.
I've seen too many people who, in 2020, sold off Bitcoin out of fear of Fed interest rate hikes, only to watch it rise from 3800 to 69000; in 2023, they again sold Ethereum out of fear of regulatory risks, missing out on a later 4-fold increase. The essence of the crypto market is a game of "a few people remain calm, while most panic."
The Bank of Japan will hold a meeting on December 19. Whether or not to raise interest rates, the market is likely to have "bad news fully priced in." What we should do now is not to anxiously scroll through financial news every day, but to adjust our positions to a state where we can "sleep well," for example, 30% Bitcoin as ballast, 20% Ethereum and other opportunities, and leave the rest untouched.
