As the Bank of Japan's interest rate decision approaches, whether a rate hike will impact the crypto market has become a hot topic of discussion.

The current market pricing is already quite sufficient—there's nearly a 98% probability of a 25 basis point hike to 0.75%, which is at a high level not seen in nearly twenty years. The logical chain behind this is quite clear: once the cost of yen financing rises, positions accumulated through carry trades will be forced to close, a large amount of capital will flow back to Japan, and liquidity in risk assets will experience a phased tightening. Mainstream cryptocurrencies like BTC and ETH are almost certain to face short-term pressure.

Looking at history, it’s evident. After the three rate hikes in March and July 2024, and January 2025, Bitcoin experienced over 20% retracements, with the largest drop approaching 31%. These data are here, not to scare anyone.

However, there are several possible outcomes. The first is in line with expectations—if the central bank raises rates by 25 basis points and maintains a neutral stance, the market may first digest the uncertainty, leading to short-term consolidation and correction. The second is a hawkish scenario—either a larger increase or signals of continued rate hikes, which could expand the retracement. The third is an unexpected outcome—if the central bank decides to keep rates unchanged, sentiment may recover, but how high the rebound can go will depend on the liquidity situation at the end of the year.

So, the current strategy is basically to wait. Wait for the meeting results to be confirmed before reassessing opportunities, focus on whether mainstream assets can absorb selling pressure, and observe how the central bank’s subsequent policy statements change. Manage positions and pace carefully, with risk control as the top priority.