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The Bank of Japan's rate hike (end or weakening of ultra-loose monetary policy) typically has a bearish and structurally differentiated impact on the crypto sector. The core logic lies in yen arbitrage trading and global liquidity.
Japan's rate hike → Yen appreciation → Arbitrage funds flow back → Risk assets come under pressure → Short-term bearish sentiment in the crypto space (BTC remains resilient, altcoins weaken further)
1. Yen arbitrage trading is "disrupted"
For a long time: Borrow Yen (low interest rate) to invest in US stocks / cryptocurrencies / high-yield assets
Once Japan raises interest rates: Cost of borrowing Yen increases, Yen appreciation risk rises, arbitrage funds are forced to close positions and flow back to Japan
2. Marginal tightening of global liquidity
Japan is one of the last "super dovish" central banks globally:
Rate hike = Global synchronized tightening phase, risk appetite declines
Especially unfriendly to high-volatility, high-leverage crypto markets