The Bank of Japan's largest interest rate hike in thirty years: Is the "liquidity faucet" for the crypto market about to be turned off?
Bitcoin prices have slid from $92,000 to below $86,000, with hundreds of millions of dollars being withdrawn from cryptocurrency ETFs, all seemingly paving the way for the upcoming monetary policy meeting in Tokyo.
The market widely expects the Bank of Japan to raise the policy interest rate by 25 basis points to 0.75% during the meeting on December 18-19. This would be the highest level of interest rates since 1995.
The yield on Japan's 10-year government bonds has surged to 1.978% ahead of the meeting, reaching a new high since June 2007. Meanwhile, the cryptocurrency market has already begun to digest this impact, with Bitcoin prices under pressure and institutional funds showing defensive outflows.
The decision the Bank of Japan is about to make marks the end of an era. The market expects this rate hike of 25 basis points to 0.75% to be almost a foregone conclusion.
If the expectations materialize, Japan's interest rates will reach their highest level in thirty years. This change is viewed by analysts as the "last major event" in the financial markets this year, and its impact may be seriously underestimated by the market.
The Bank of Japan's policy shift has not been sudden. Since ending its negative interest rate policy in March 2024, Japan has entered a new round of interest rate hikes. Market focus has shifted from "whether to raise rates" to "how the future rate hike path will unfold." #加密市场观察 $BTC
