2025-12-20 04:21:51

Just now, the Bank of Japan unanimously approved a rate hike of 0.75%, the most aggressive move since 1995. It may seem normal on the surface, but behind it involves $4 to $5 trillion in yen arbitrage trading.

In simple terms, Japan has maintained zero interest rates for decades, and once it takes a serious step, the entire global financial system will shake. Why? Because global investors have been borrowing cheap yen to buy US bonds, US stocks, and high-liquidity assets like $BTC, $ZEC, and $BCH. Now that financing costs are rising and yen appreciation expectations are emerging, this trade no longer makes sense.

How will capital move? Very simply—sell off overseas assets and repatriate funds to Japan. BTC, as the riskiest asset, has already felt the impact. Historically, after Japan's rate hike in July 2024, BTC plummeted 23% in one week. This time? Before the rate hike, BTC was already volatile with a 5.5% single-day swing, and $600 million in leveraged longs were liquidated. Although BTC later rebounded to $87,000, institutional holdings data shows funds are quietly deleveraging.

Even more concerning, $23 billion in options are expiring, which will further amplify volatility. Plus, while the Federal Reserve is reversing rate cuts, Japan is raising rates against the trend. What does this policy divergence hide? The US is harvesting gains—Warren Buffett's yen-based investments in Japanese companies are the best proof.

But there's a bigger issue. Japan's debt-to-GDP ratio is as high as 263%, with the central bank holding 55% of government bonds. When rates rise, government interest payments will surge directly. Can Japan withstand continuous rate hikes? Will Japanese bonds collapse? These questions hang like swords over the global markets.

For us, don't get confused by short-term rebounds. Keep your position in any single coin below 20%, monitor ETF fund flows and yen exchange rates closely, and hedge risks with put options. Most importantly, watch whether Japan will initiate a real tightening cycle—this is the key factor that will determine global liquidity.

BTC-0,37%

ZEC-0,47%

BCH-1,01%

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ETHmaxi_NoFilter

· 2025-12-20 04:51

Japan's recent move is really aggressive, but to be honest, I'm more concerned about what kind of market will be triggered when the $23 billion options expire—that's the real key to determining BTC's next direction. --- $600 million leverage liquidated, it feels like this round is just clearing out over-leveraged retail traders, while institutions are quietly accumulating. It's quite interesting. --- Wait, Buffett using yen to scoop up Japanese companies is indeed impressive. The US is really harvesting, and retail investors can only get cut. --- Keeping position control within 20% is a good suggestion, but the problem is, who can withstand the temptation of seeing BTC rise 50% and not chase? Haha. --- A Japanese bond crash would be a major event. If that happens, global liquidity would freeze directly, which is much scarier than a 20% drop in BTC. --- This time is different from July; the atmosphere feels completely changed. Is the Bank of Japan really going to tighten the cycle this time? --- Keeping an eye on ETF capital flows—this is a trick even seasoned traders know. The key still depends on what institutions are doing.

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FudVaccinator

· 2025-12-20 04:47

The Bank of Japan's move is really ruthless, but honestly, the real disaster will be when the 23 billion options expire. It's the same old trick: dump coins, cut leverage, then rebound again, institutions repeatedly harvesting retail investors' gains. The 263% yield on Japanese bonds is really unsustainable; it will blow up sooner or later, and the whole world will follow suit. Warren Buffett is buying companies in Japan, while we're still chasing after the highs and lows. The gap is enormous. I've cut my holdings in half; I'd rather stay in cash than get caught in this market swing. The yen exchange rate is the key; keeping an eye on this indicator is more important than watching candlestick charts. It feels like this recession has just begun, and there’s more turbulence ahead.

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MetaverseLandlord

· 2025-12-20 04:46

Wow, Japan is really serious this time. The arbitrage trades worth 4-5 trillion USD need to be closed. The yen arbitrage liquidation this time, the crypto circle is the one taking the blame... Last July, it dropped 23%, and now it’s happening again? By the way, Japan’s debt is 263% of GDP. They still dare to raise interest rates, but this debt trap will eventually explode. The key is how the Federal Reserve moves; policy divergence is too critical. Institutions are secretly deleveraging, while retail investors are still sleepwalking. It’s really a bit...

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GetRichLeek

· 2025-12-20 04:29

Oh my, Japan is causing trouble again. My position is definitely going to be cut again. Wait, 23 billion in options expiring? Will this be even worse than the July wave... I suffered heavy losses back then. The big players are really planning something. Quickly reduce leverage, everyone, and don't be greedy like me.

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