The depreciation of the yen combined with rising inflation is favorable for cryptocurrencies in the short term, volatile in the medium term, and bullish in the long term.
Low interest rates + depreciation of the yen have led to active carry trades, with a large influx of low-cost yen funds entering the cryptocurrency market, pushing up the short-term liquidity and prices of BTC and ETH; local Japanese funds will also increase their holdings in cryptocurrencies to hedge against the depreciation of the local currency and resist inflation, further boosting the market.
If inflation forces the Bank of Japan to raise interest rates, the cost of financing in yen will increase, and arbitrage funds will withdraw, resulting in a phase of selling pressure and increased volatility for cryptocurrencies.
In the long term, the purchasing power of the yen continues to shrink, highlighting the anti-inflation and safe-haven attributes of cryptocurrencies, enhancing the core asset allocation value, compounded by global liquidity interconnections, thus stabilizing mid-term bottom support.
Follow the captain's footsteps closely, hit the rhythm accurately, and the captain will take you all to soar with the wind and steadily reap the rewards!
