$DOGE
Epic Divergence! Japan's First Rate Hike in 30 Years, the US Cuts Rates 6 Times, Is Liquidity in the Crypto Space About to Change?
Family, it's going to be a big deal! The biggest macro news by the end of 2025 is here—The Bank of Japan just announced an interest rate hike to 0.75%, the highest rate in 30 years, while the Federal Reserve is aggressively cutting rates, having lowered them 6 times in a row to 3.5%-3.75%! This wave of “US Easing and Japan Tightening” is hiding a big logic of global capital reshuffling, is the crypto space about to face a new storm?
Japan's interest rate hike is not a spur-of-the-moment decision! After enduring 30 years of ultra-loose policy, the core CPI has risen for 51 consecutive months, forming a virtuous cycle of wages and prices, finally getting rid of the deflationary quagmire. More critically, the yen was previously seen as a “global cheap financing currency,” allowing “Mrs. Watanabe” to crazily borrow yen to invest overseas for arbitrage, leading to capital outflows, a plummeting yen, and soaring import costs. This interest rate hike aims to narrow the interest rate gap between Japan and the US, stabilize the yen, retain capital, and also alleviate pressure on people's livelihoods.
The US rate cuts are a precise “rescue”! Core inflation has dropped to a three-year low of 2.6%, but high interest rates have placed a heavy burden on government debt interest, also suppressing consumption and investment. Adding to this, Trump has repeatedly pressured for “significant rate cuts,” even wanting to nominate a dovish Federal Reserve chairman, with the subsequent easing potentially exceeding expectations. Essentially, the US economy is aiming for a “soft landing,” relying on rate cuts to prevent recession and stabilize employment.
The most critical impact is on the crypto space: the yen's interest rate hike may trigger the unwinding of carry trades, as seen before when Bitcoin plummeted due to interest rate hike expectations; meanwhile, US easing is releasing liquidity, and Trump’s friendly attitude towards cryptocurrencies is an added bonus. Global capital is being reallocated, will this wave of “tightening and easing” push Bitcoin towards 140,000, or will it cause short-term fluctuations?
Do you think this wave of policy divergence will lead the crypto space into a bull market? Will the unwinding of carry trades flow into cryptocurrencies?