Welcome to the morning briefing on American cryptocurrency news — your essential summary of the key developments in the world of digital currencies for the coming day.
Have a coffee because today's morning briefing is not just about interest rates. It’s about leverage, financing, and which side of the Pacific sets the rhythm of risk assets when policy paths diverge. While one central bank (the United States) eases, the other (Japan) tightens. The tension between the two has begun to reshape global liquidity in ways that do not appear in a single chart or price candle.
Today's news on cryptocurrencies: Japan raises interest rates, but the Federal Reserve cuts benefits; which side has a stronger impact?
Global markets are in a stalemate, amid a rare and consequential divergence in policies. On one hand, the US Federal Reserve has begun lowering interest rates to support slowing growth. In contrast, the Bank of Japan (BOJ) is moving in the opposite direction, raising interest rates to levels not seen in three decades.
The question facing investors is no longer whether these steps are important, but which one ultimately carries more weight for global liquidity, currencies, and cryptocurrency markets.
On December 19, the Bank of Japan raised interest rates by 25 basis points to 0.75%, the highest level since 1995. This represents another step away from decades of extremely accommodative monetary policy. Macro analysts see this move as more than just a routine adjustment.
Unlike the interest rate cuts initiated by the Federal Reserve, which are periodic and designed to cushion economic slowdown, Japan's tightening is structural. For nearly 30 years, Japan's near-zero interest rates have been one of the world's most important sources of cheap leverage.
Even minor increases now carry significant consequences as they disrupt deeply rooted financing strategies in global markets.
The immediate impact was more apparent in currency markets. Despite the historic rise, the yen initially weakened as Governor Kazuo Ueda provided limited clarity on the pace of future tightening.
Reuters noted that the currency fell with "the Bank of Japan's stance being unclear regarding the tightening path." This highlights how future guidance, not just the act itself, remains critical.
However, analysts argue that the real transmission channel lies elsewhere: the yen trading, as noted in a recent post from US Crypto News.
With rising Japanese yields and the narrowing gap between the US and Japan, borrowing yen to finance higher-yielding positions becomes an increasingly costly endeavor.
Here the divergence between Tokyo and Washington becomes critical:
Federal Reserve cuts tend to gradually support markets by easing credit conditions.
In contrast, Japan's tightening forces an immediate repositioning with rising costs of financial leverage.
Historically, cryptocurrency markets have seen this effect faster than traditional assets. Previous tightening cycles by the Bank of Japan coincided with sharp declines in Bitcoin's value of 20–30% alongside liquidity tightening and a breakdown of carry trades.
This pattern made Bitcoin's recent stability stand out. As of this report, BTC was trading at $88,035, an increase of nearly 1% over the last 24 hours.
"History shows that every previous tightening caused a 20–30% decline in Bitcoin with the yen trades decoupling and liquidity tightening. However, with the hike fully priced in and Bitcoin holding around $85,000 and $87,000, this may be the dip buyers have been waiting for," wrote analyst Blublok.
However, resilience at the top of the cryptocurrency market does not eliminate risks elsewhere. Altcoins, which are more sensitive to liquidity conditions, remain vulnerable if Japan continues its tightening.
In fact, Bank of Japan officials have publicly indicated their readiness to continue tightening if wage growth and inflation persist. Analysts at ING and Bloomberg warned that while further increases may not be imminent, the trend is clear.
The impact on global markets is clear. Federal Reserve cuts may provide broad support over time, but Japan's retreat from overly easy policies directly touches the foundation of global leverage. If the Bank of Japan continues on this path, its impact on liquidity, currencies, and cryptocurrencies may outweigh US easing, at least in the short term.
Today's map
Here’s a summary of more US cryptocurrency news to follow today:
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XRP's selling pressure collapses by 39%, but this price level still controls the outcome.
Bitcoin whales have moved — but not in the way the markets assumed.
Overview of cryptocurrency stocks before the markets.
Company As of December 18 Pre-market overview Strategy (MSTR) $158.24 $163.97 (+3.62%) Coinbase (COIN) $239.20 $246.00 (+2.84%) Galaxy Digital Holdings (GLXY) $22.51 $22.95 (+1.95%) Mara Holdings (MARA) $9.69 $9.87 (+1.86%) Riot Platforms (RIOT) $13.38 $13.73 (+2.62%) Core Scientific (CORZ) $14.56 $15.04 (+3.30%)
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