Family! It's chaotic! This morning, the Bank of Japan released a significant signal, basically confirming an interest rate hike to 0.75%, a move not seen in 30 years! Don't think this is just Japan's little game; this interest rate hike blade has long been aimed at the global financial market, especially at us who are struggling in the cryptocurrency market, both old and new players! Should we enter the market or run away? Don't rush to make a decision; let me, an analyst with 8 years of experience, clarify this for you!
Some may ask: how does the interest rate hike in Japan relate to my cryptocurrency assets? Don't rush; let me break down a core logic for you. If you understand it, you'll know why you should be anxious but not panic. For the past few decades, the global financial circle has been playing a game of 'using empty hands to catch a wolf', borrowing yen, buying US Treasuries, trading stocks, and hoarding cryptocurrency assets. Why play like this? Because yen interest rates were previously so low that it was almost free; borrowing 1 million yen cost hardly anything, and then investing it in higher-yield markets easily netted the interest spread.
But now things are different! With Japan's interest rate hike, the cost of borrowing yen has directly doubled, and that 'free lunch' is completely gone. What to do if the game can't be played anymore? You can only close positions to stop losses and cash out to repay! This means that the massive funds that previously borrowed yen to enter the market will frantically withdraw from US Treasuries, US stocks, and our cryptocurrency market. This is not small money; it is the 'smart money' that can leverage the market. Do you think this is good or bad for the cryptocurrency market?
Let me give you some solid data; relying on history is more reliable. Look back at the recent market; Bitcoin's plunge from around $85,000 was not accidental; the market anticipated this risk and ran away in advance! Looking back further, after the last three interest rate hikes in Japan, Bitcoin was inevitably smashed down by 20%-30% within a month. This is not mysticism; it is the inevitable result of funds withdrawing.
Speaking of which, my viewpoint must be clear and unambiguous: in the short term, the cryptocurrency market is at full risk, and opportunities are pitifully scarce! This is not a trivial matter of 'just one interest rate hike' but a signal of the end of the global 'cheap money era', with a key funding faucet being tightly shut. The upcoming market is likely to experience increased volatility, with leveraged funds being frantically harvested. Newcomers entering the market will be cut down in minutes, and veteran players must also hold their positions tightly. In short: those charging forward now are not brave, they are foolish!
So what should we do next? Don't panic, I have three simple words for you: wait, watch, pick!
First, wait for the storm. The most important thing to do now is to control your hands! Don't keep staring at the market thinking about buying the dip; the current bottom might just be halfway down the mountain. Wait until this 'negative bomb' of Japan's interest rate hike really hits, see how the market will drop and how panicking the emotions will be, and only act after the storm has completely passed. Acting impulsively now is like sailing a small boat in a typhoon; you could capsize in an instant.
Second, watch the signals. This step is crucial as it determines whether you can buy at the bottom later. Focus on two signals: first, will the Governor of the Bank of Japan hint in his subsequent speech that 'we will continue to raise rates next year'? If he dares to say that, the pressure for funds to withdraw will increase; second, what will be the reaction from the US side? With massive funds withdrawing from US Treasuries, will the US intervene to stabilize the situation? Until these two signals are clear, do not touch it!
Third, pick up bargains. This is our ultimate goal! When the market experiences a panic sell-off due to fund withdrawals and quality cryptocurrency assets are wrongly killed, that is when we should be alert. Prepare your funds in advance, select quality projects with practical applications and reliable teams, and when they drop to reasonable valuations or even become undervalued, then act precisely. This is the correct approach of 'being greedy when others are fearful' rather than panic-following or blindly buying the dip now.
As the old saying goes, you only know who is swimming naked when the tide goes out. Now the tide is not only going out but also coming with waves, and those swimming naked will soon be washed up on the beach. What we need to do is stand on the shore and wait patiently until the tide goes out to the lowest point, then go pick up those 'treasures' that have been washed ashore.
Of course, many friends may not know how to judge when the storm will pass and how to choose quality assets. Don't worry, just follow me! I will keep an eye on the dynamics of the Bank of Japan and the US market 24/7. Once I spot a clear signal and an opportunity to buy cheap, I will remind you on my homepage right away! Additionally, if you comment 'risk aversion', I will send you my organized list of 'quality assets for the interest rate hike cycle' for free, helping you avoid pitfalls and target correctly.
Just a final reminder: the market is not short of opportunities, but it lacks those who can survive until the opportunities arise. Now stabilizing your position and patiently waiting is more important than anything else. Hurry up and follow me.
