Regarding the recent concerns about Japan's interest rate hike triggering black swan events in the cryptocurrency market

In July last year, Japan's interest rate hike led to a sharp decline in the crypto market because of the low yen interest rate. Most arbitrage funds preferred to borrow yen to invest in high-yield assets while shorting the yen to offset exchange rate fluctuations. After Japan's government raised interest rates, such arbitrage directly resulted in liquidation, causing significant impact on the liquidity of U.S. stocks. However, this year, most arbitrage funds have ceased operations. Many people on X are seeking attention, making extreme statements, so let’s start with the data:

July 2024: Speculative net short positions: 182033 contracts (the market is extremely crowded with short positions)

December 2025: Speculative long positions: 70414 contracts (market sentiment leans towards the yen)

Moreover, this year, the Bank of Japan has learned from last year's lessons and started to gradually release information to the market as a precaution.

Summary: Even if the Bank of Japan raises interest rates, it will only raise them to a maximum of 0.75, which has limited liquidity impact. Once the central banks around the world, including the Federal Reserve, start to inject liquidity, Japan will not have a significant impact on market liquidity, and there will be no repeat of last July's flash crash. The focus should still be on monitoring the Federal Reserve's dynamics.