$BTC $ARB $LUNA
🔥🔥This time, the Bank of Japan may really be up to something!
The Minister of Finance and the Governor have been hinting, and now more than 75% of the market is betting on an interest rate hike on December 18th.
You may ask why this matters to our cryptocurrency trading? Simply put, the world’s cheapest “liquid cash” — the Japanese yen — will become less accessible for borrowing.
For decades, players around the world have been playing a game: borrowing nearly interest-free yen from Japan, converting it into dollars, and then rushing into places like Bitcoin and US stocks to make money. Now that Japan is raising interest rates, it’s like increasing the cost of borrowing money, or even suddenly announcing a loan withdrawal. What will happen? Everyone will have to quickly sell their Bitcoin to pay back their yen debts, causing the price to drop. This is what is referred to as a “arbitrage trading crash.” So, just a few days ago, as soon as there was any hint, Bitcoin plunged nearly ten thousand dollars.
· Short-term outlook: All cryptocurrencies will feel pressure, especially those that are highly leveraged and have low trading volumes; they will fall harder.
· Long-term outlook: Japan's interest rate hike is just a “brake,” the real “accelerator” depends on the Federal Reserve. Moreover, every time global policies go haywire, there will always be funds treating Bitcoin as a “safe haven,” which may lead to a market drop before slowly climbing back up.
What should we do?
1. Reducing leverage is the top priority; do not get swept away during market liquidations.
2. Pay close attention to the USD/JPY exchange rate; if it spikes significantly (the yen becomes more expensive), be cautious.
3. If the market really drops, prioritize buying Bitcoin and Ethereum, those hard currencies, and don’t rush into those smaller altcoins.
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After the yen interest rate hike is implemented, how will the cryptocurrency market move? Will it be a short-term negative that has fully played out, or will it start a wave of adjustments? What do you think?
