Have you recently been inundated with U.S. ADP and non-farm payroll data? When you open the market software, the screen is full of 'speculations on Federal Reserve policy,' but I dare say that what can truly make the crypto market shake is actually another major event that you all overlooked—Japan's interest rate hike!
Don't believe it? Let's look at history: In 2000, the internet bubble burst, and many people only blamed the high valuations of tech stocks, but no one noticed that Japan's interest rate hike was the key straw that broke the camel's back; In 2008, the U.S. subprime mortgage crisis swept the globe, and everyone criticized Wall Street's greed, but forgot that Japan's policy shift had long buried the seeds of liquidity tightening. This is not a coincidence, but the power of the yen, the 'global liquidity tap'!
As someone who has been in the crypto circle for 10 years, I must say this: The destructive power of Japan's interest rate hike is far deadlier than that of the Federal Reserve! After all, the Federal Reserve is a 'high-frequency operator,' adjusting rates several times a year, and the market is already prepared; but the Bank of Japan is a 'big surprise operator,' only taking action once every few years or even decades, and when they do, it's a 'big bang' that no one is ready for!
First, understand the core logic: Why can the yen 'stir up the global market'?
Many retail investors might ask: What does Japan's interest rate hike have to do with my investment in crypto assets? This brings us to the 'special identity' of the yen—it's the 'invisible ATM' for global risk assets!
For a long time, Japan has implemented a zero or even negative interest rate policy, simply put, it's 'almost free to borrow money.' Whether it's big institutions on Wall Street or small retail investors around us looking to leverage, they all love to do one thing: borrow yen! Then, with this nearly cost-free money, they invest in stocks, buy bonds, and allocate digital assets to profit from price differences. This operation is like 'free money grabbing'; who wouldn't want that?
But once Japan raises interest rates, this 'wool business' will be completely over! The cost of borrowing will suddenly soar, erasing previous arbitrage opportunities, and what's worse is that those with high leverage positions will be forced to close their positions due to skyrocketing costs. It's like a domino effect; once the first one falls, the chain reaction can't be stopped.
Warning: 3 deadly shocks of Japan's interest rate hike on the crypto market
Don't think this is a distant issue; the target for Japan's interest rate hike is likely 75 basis points, an operation we haven't seen in the past 30 years! For the crypto market, this means three risks that must be guarded against:
Liquidity collectively 'sucking out': The prosperity of the crypto market essentially relies on ample liquidity. Once Japan raises interest rates, global arbitrage funds will collectively withdraw to repay loans, directly tightening the 'money bag' of the crypto market. By then, don't even think about rallying; avoiding a massive sell-off would be good enough, which is why I've been reminding everyone to reduce leverage and control positions recently.
High-leverage positions collectively exploding: Many institutions and retail investors, in pursuit of high returns, will borrow yen to leverage 2-3 times on popular coins like $ZEC $BEAT $H. Once interest rates rise, the cost of borrowing increases, and these high-leverage positions will be forcibly liquidated by exchanges, leading to a sharp decline in coin prices, and possibly a devastating scenario of 'mutual liquidation.'
Market panic spreads: History has proven that every interest rate hike by Japan triggers panic in global financial markets. The crypto market is already highly volatile, heavily influenced by sentiment; once panic spreads, funds will flock to safer assets like gold and government bonds, and the crypto market may face a wave of sustained adjustments.
Advice from an old hand: Don't wait for the crash to regret it
It's not about blindly being bearish, but about preparing in advance: ① Immediately reduce leverage! Regardless of what coins you hold, don't rely on borrowing coins to leverage anymore; after the rate hike, leverage becomes a 'death knell'; ② Prioritize holding mainstream coins, reduce positions in niche coins; mainstream coins have stronger risk resistance; ③ Reserve 30%-50% cash positions; when a correction occurs, it can actually provide an opportunity to bottom out; ④ Closely monitor the Bank of Japan's actions; I will also provide timely interpretations afterward.
Lastly, let me say something heartfelt: Making money in the crypto circle relies not on luck, but on sensitivity to global macro policies. Many people only focus on the immediate non-farm data and platform activities, ignoring the 'heavy bomb' of Japan's interest rate hike, and end up being cut down without knowing why. Follow me@链上标哥 , and don't get lost!
