$ANIME
The Japanese yen's interest rate hike has caused a shockwave! In just 24 hours, 180,000 people in the crypto market were liquidated; who is reaping the rewards behind the scenes?
A policy resolution announced in the early morning in Tokyo has surprisingly become the 'harvest order' for the global cryptocurrency market! The Bank of Japan suddenly announced a 25 basis points interest rate hike, pushing rates to 0.75%, the highest level in 30 years. As soon as the news broke, Bitcoin plummeted, directly falling below the $86,000 mark. Within 24 hours, the total liquidation amount exceeded $600 million, and 180,000 investors suffered significant losses, with their accounts instantly wiped out. This monetary policy adjustment, seemingly unrelated to the crypto market, has triggered a bloody storm in the cryptocurrency sphere through the chain of yen carry trades.
The occurrence of all this actually had its foreshadowing. For decades, the yen has leveraged its near-zero interest rate advantage to become the cheapest funding currency globally. From individual investors like 'Mrs. Watanabe' to large institutions like Wall Street hedge funds, everyone has been frantically borrowing yen to leverage and flood into the crypto market for arbitrage. At its peak, the trading volume of Bitcoin denominated in yen accounted for as much as 35%. Now, with the interest rate hike in effect, the cost of financing has skyrocketed 12 times, and this no-cost, high-profit strategy has completely collapsed. Institutions were forced to liquidate crypto assets frantically to cover their yen shorts, plunging the market into a 'decline-liquidation-further decline' death spiral.
History has already given us warnings. In the past three interest rate hikes by the Bank of Japan, Bitcoin experienced a deep correction of 20% to 30%. Moreover, on-chain data has revealed critical signs: 48 hours before the rate hike, Bitcoin outflows from Japanese exchanges surged by 217%, indicating that market makers had already laid their plans in advance, waiting for the harvesting opportunity. For ordinary investors, the impact of the yen's interest rate hike goes far beyond the plummeting coin prices. The large-scale withdrawal of arbitrage funds has directly led to a liquidity crisis in the market, with volatility soaring to 2.3 times that of USD trading pairs. Many bottom-fishers who intended to catch the floor instantly became prey for quantitative algorithms.
Currently, the Bank of Japan has clearly hinted that it may continue to raise interest rates, and the liquidation pressure from carry trades continues to ferment. Is this storm merely a short-term correction, or the beginning of a bear market? Did you avoid the leverage risk in advance and escape this bloodbath?
