Why is Japan raising interest rates and what impact is it having on the crypto market? 🇯🇵
After a long time, Japan has taken an important step.
The Japanese government has increased the interest rate on its government bonds.
Now the question is
what is the connection of this decision to the crypto market?
Meaning of increasing interest rates
When interest rates rise, investing in government bonds becomes more attractive, as the returns there are considered relatively safe.
Why does pressure come on crypto?
When returns on safe investments increase, some investors
pull their money out of risky investments like crypto
and move towards bonds.
This is why a temporary decline is seen in the crypto market.
Impact of a stronger yen
An increase in interest rates strengthens the Japanese yen,
and when the yen strengthens, the flow of money in global markets
decreases,
which also affects crypto.
Future outlook
This situation is mostly temporary.
Smart investors, instead of panicking,
carefully observe the market during such times
and make better decisions.
👉 In summary,
increase in interest rates in Japan
puts temporary pressure on the crypto market,
but in the long term, the real importance
is the increase in trust and usage.
