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Welcome to the US Morning Cryptocurrency Newsletter – a comprehensive look at the most important developments in cryptocurrency for the day ahead.
Grab your coffee as world markets turn quietly as Japanese bond yields rise and the Bank of Japan signals an interest rate hike. The yen’s long-term interest deal, which has fueled stocks, cryptocurrencies and risk assets, may unravel faster than expected.
Today’s Crypto News: Bitcoin Gears Up as BoJ May End Decades of Cheap Money
Global markets are anticipating a potential macroeconomic shock as the Bank of Japan prepares for its monetary policy meeting on December 18-19.
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Traders now estimate a 90% chance of a rate hike of 25 basis points, As a result of the signals from the Governor of the Bank of Japan Kazuo Ueda Inflation remains above 2%.
The yield on two-year Japanese government bonds rose above 1%, the highest since the 2008 global financial crisis, while… receipt The yield on 10-year Japanese government bonds hit a 17-year high, highlighting rising borrowing costs.
Why is yen carry trading important?
For almost three decades, the yen’s low interest rate has fueled global risk. Investors borrow yen at very low rates, convert it to dollars, and invest the capital in higher-yielding assets, including U.S. stocks and bonds and cryptocurrencies like Bitcoin.
When Japan raises interest rates or strengthens the yen, this trade collapses violently, forcing a rapid sale of assets.
The consequences are not hypothetical: in August 2024, the height of the Bank of Japan removed $ 600 billion from the cryptocurrency market, including Bitcoin falling to $ 49,000 and $ 1.14 billion in liquidations. Analysts warn that a similar scenario could be repeated if Japanese yields rise further.
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Alongside analyst Paul Barron, analyst Grete Martis considers the BOJ’s hike a potential “canary in the coal mine” for cryptocurrencies and global markets.
Martis wrote In a place “When the reckless Bank of Japan is forced to raise interest rates, the agreement of the low yen will begin to collapse, causing market turmoil. The canary in the coal mine.”
Meanwhile, The first signs of stress emergeas hedge funds and institutional investors are paying attention to the simultaneous strengthening of liquidity in Japan, the United States and China. This rare convergence could accelerate deleveraging.
However, there are counterpoints. The Negentropic analyzer indicates to The majority of leverage has already been removed since October. Similarly, Bob Elliot argues that leveraged yen trading is largely silent.
But even small pullback magnitudes can put pressure on highly leveraged positions in cryptocurrencies and risk assets around the world.
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Nic Puckrin, co-founder of Coin Bureau, confirms that quantitative easing (QE) Historically it follows the crisis, not the routine policy adjustments.
The current softening in Japan, the US and China suggests that markets may face further declines before any liquidity support arrives. Investors who bet on easy money may experience greater volatility than expected.
Cryptocurrency markets are often the first to absorb funding shocks, making Bitcoin and Ethereum early indicators of liquidity stress.
As the Bank of Japan’s interest rate decision approaches, traders should keep an eye on:
- Japanese government bond yields,
- Levels of USD/JPY, and
- leveraged positions.
If Japan continues to strengthen, global deleveraging could continue until 2026, testing the resistance of crypto and traditional markets.
The era of Japanese easy money seems to be coming to an end. Markets are now facing a more volatile environment, where fundamental value can replace low cost leverage as the primary driver of asset prices.
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Today’s chart
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Here is a summary of the latest US cryptocurrency news for you to follow today:
Overview of the cryptocurrency market before the opening
| Company | ||
| Strategy (MSTR) | $186.01 | $184.62 (-0.75%) |
| Coinbase (COIN) | $274.05 | $273.30 (-0.27%) |
| Galaxy Digital Holdings (GLXY) | $27.57 | $27.73 (+0.58%) |
| Mara Holdings (MARA) | $12.44 | $12.37 (-0.57%) |
| RIOT Platforms | $15.59 | $15.57 (-0.13%) |
| Scientific Korean (CORZ) | $17.08 | $17.09 (+0.059%) |
