The Bank of Japan (BoJ), one of the world’s most influential central banks, is preparing a historic shift: starting in January 2026, it will begin selling off its massive ETF portfolio worth 83 trillion yen (about $534 billion). The move comes just as markets brace for the country’s first major interest rate hike in two decades — and the crypto world is watching closely.
A Slow and Strategic Exit From ETFs
According to official plans, the BoJ will gradually offload its ETF holdings to avoid shocking markets. The current roadmap sets a pace of 330 billion yen per year, meaning the process could stretch out over decades.
This shift is significant — the central bank holds unrealized gains after a sharp rise in Japanese equities over the last two years. With such a dominant position in the domestic stock market, BoJ’s unwind, even if slow, will impact global liquidity flows far beyond Asia.
Interest Rate Hike Expected: Highest Since the Early 2000s
Markets widely expect BoJ to raise interest rates by 25 basis points at its December 18–19 meeting, taking the benchmark rate to 0.75% — the highest in nearly 20 years. On Polymarket, there’s currently a 98% probability of that hike being confirmed.
This move could reshape global capital flows. For decades, the Japanese yen has been the top funding currency for carry trades, where investors borrow yen and invest in higher-yielding assets — including cryptocurrencies. That dynamic is now breaking down.
“For years, the yen was the go-to currency for cheap leverage. But with Japanese bond yields rising rapidly, the carry trade is shrinking fast,” notes crypto analyst Mister Crypto.
Bitcoin Feels the Pressure
Markets are already reacting. Bitcoin has slipped below $90,000, currently trading near $89,700. Still, analysts say the reaction has been relatively muted. With BoJ’s policy shift widely anticipated, many traders have already adjusted their positions.
However, the pressure is real. As yen-based leverage contracts, risk assets like Bitcoin are increasingly exposed — especially in an environment of tightening global liquidity.
ETF Market Under the Microscope
ETFs have become a critical part of global investing, covering everything from stocks to digital assets. BoJ’s exit from this space comes at a time when Bitcoin ETFs are gaining traction in Western markets, marking a generational shift in how investors access crypto.
While Japan pulls liquidity back, investors in the U.S. and elsewhere are watching closely. For the crypto sector, one thing is clear: 2026 may be a year of survival for only the most resilient players.
#BankOfJapan , #etf , #CryptoLiquidity , #DigitalAssets , #BTC
Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“
