Bitcoin Traders Brace for Bank of Japan Rate Hike Amid Crypto Sell-Off
Bitcoin is under pressure as the Bank of Japan (BOJ) signals a significant shift away from its ultra-loose monetary policy, possibly tightening global liquidity and affecting risk assets. Bitcoin has dropped nearly 30% from its recent peak, currently trading at $87,800. Markets expect the BOJ to raise interest rates for the second time this year, marking further normalization and potentially continuing hikes into 2026. These changes may strengthen the yen, unwind long-standing carry trades, and reduce global liquidity, which analysts believe could hurt Bitcoin and other risk assets by curbing speculation. While this could benefit assets with intrinsic scarcity like Bitcoin over less-established cryptocurrencies, the overall impact may remain volatile given conflicting macroeconomic signals globally: Japan is raising rates while the US is lowering them, and Europe faces stagnation. Analysts suggest these opposing trends could balance out in the long run but may intensify short-term volatility. With end-of-year low liquidity, crypto markets are expected to remain fragile and volatile, with the BOJ’s rate decisions serving as a key focus for traders.
