\n
Ah, zee Bitcoin! Once again, it dances under the ominous shadow of the yen carry-trade, as we approach the grand spectacle of the 9-10 December FOMC meeting and the likely hawkish pirouette of the Bank of Japan on December 18-19. Truly, a déjà vu of last summer’s tragic comedy, when Tokyo’s policy shift sent risk assets-including our beloved crypto-spiraling into chaos.🎭
\n\n
Analyst Benjamin Cowen, ever the dramatist, draws a direct line from today’s turmoil to that fateful July shock. “In July 2024,” he proclaims, “the Fed cut rates while the BOJ raised theirs, triggering the unwinding of the carry trade. Bitcoin, the poor protagonist, capitulated and found solace only a week later.” He adds, with a flourish, “History may repeat itself on December 10th! A Fed cut, a BOJ hike-could Bitcoin find its low mid-December?” Oh, the suspense!🍿
\n\n
Last year’s acts were indeed more nuanced-markets eagerly priced in Fed easing while the BoJ delivered a surprising hike. Yet, Cowen’s core observation remains: when U.S. policy loosens just as Japan tightens, the yen carry trade falters, and high-beta assets-like our dear Bitcoin-are left weeping in the wings.🎭
\n\n
“But why,” you ask, “does this matter to Bitcoin and the crypto realm?” Allow Truflation to illuminate: large institutions borrow yen, where interest rates are laughably low, and invest in the U.S. Interest-bearing instruments yield a modest 3-4%, but greedier souls chase stocks and bonds for greater reward. All this is underpinned by the BoJ’s policy of keeping the yen cheap against the dollar.🤑
\n\n
Yet, danger lurks! When stocks fall and the yen rises (or threatens to), institutions rush to exit, fearing losses on their yen debts. They sell U.S. assets, buy yen, and repay their loans, triggering a cascade of asset sales and yen purchases. After years of easy money, even a modest normalization forces broad, mechanical de-risking-and Bitcoin, as a liquid, leveraged risk asset, stands squarely in the crosshairs.🎯
\n\n
Crypto trader Kevin (@Kev_Capital_TA) warns of the tight timeline: “The Fed’s Core PCE inflation measure and the FOMC meeting are mere days away,” he declares, “followed by the BoJ press conference on December 19-a monumental event for the dollar, yield curves, and yen carry trade fears.” In another post, he emphasizes, “The JP10Y continues to climb. This is no trifle, my friends!” Japanese yields rise, adding pressure on the BoJ to act.📈
\n\n
BitMEX founder Arthur Hayes ties this macro drama directly to Bitcoin’s recent plunge. “BTC dumped because the BOJ teased a December rate hike,” he argues. “USDJPY at 155-160 makes the BOJ hawkish.” He frames the sell-off not as a crypto-native event, but as a funding shock.💥
\n\n
As December unfolds, futures and economist surveys suggest an 80-87% chance of a Fed cut at the December 9-10 meeting, despite the committee’s divisions. Meanwhile, the BoJ hints it will “consider the pros and cons” of a hike at its December 18-19 meeting, with markets pricing in tightness and 10-year JGB yields near multi-decade highs.📊
\n\n
This combination-Fed easing expectations plus BoJ tightening risk-poses a grave threat to the yen carry trade. A repeat of July 2024’s pattern seems plausible: Bitcoin and other risk assets suffer a sharp sell-off, followed by a bottom once forced deleveraging runs its course.🎭
\n\n
At press time, BTC traded at $92,235.🎢
\n\n
\n
Ah, zee Bitcoin! Once again, it dances under the ominous shadow of the yen carry-trade, as we approach the grand spectacle of the 9-10 December FOMC meeting and the likely hawkish pirouette of the Bank of Japan on December 18-19. Truly, a déjà vu of last summer’s tragic comedy, when Tokyo’s policy shift sent risk assets-including our beloved crypto-spiraling into chaos.🎭
Analyst Benjamin Cowen, ever the dramatist, draws a direct line from today’s turmoil to that fateful July shock. “In July 2024,” he proclaims, “the Fed cut rates while the BOJ raised theirs, triggering the unwinding of the carry trade. Bitcoin, the poor protagonist, capitulated and found solace only a week later.” He adds, with a flourish, “History may repeat itself on December 10th! A Fed cut, a BOJ hike-could Bitcoin find its low mid-December?” Oh, the suspense!🍿
Last year’s acts were indeed more nuanced-markets eagerly priced in Fed easing while the BoJ delivered a surprising hike. Yet, Cowen’s core observation remains: when U.S. policy loosens just as Japan tightens, the yen carry trade falters, and high-beta assets-like our dear Bitcoin-are left weeping in the wings.🎭
“But why,” you ask, “does this matter to Bitcoin and the crypto realm?” Allow Truflation to illuminate: large institutions borrow yen, where interest rates are laughably low, and invest in the U.S. Interest-bearing instruments yield a modest 3-4%, but greedier souls chase stocks and bonds for greater reward. All this is underpinned by the BoJ’s policy of keeping the yen cheap against the dollar.🤑
Yet, danger lurks! When stocks fall and the yen rises (or threatens to), institutions rush to exit, fearing losses on their yen debts. They sell U.S. assets, buy yen, and repay their loans, triggering a cascade of asset sales and yen purchases. After years of easy money, even a modest normalization forces broad, mechanical de-risking-and Bitcoin, as a liquid, leveraged risk asset, stands squarely in the crosshairs.🎯
Crypto trader Kevin (@Kev_Capital_TA) warns of the tight timeline: “The Fed’s Core PCE inflation measure and the FOMC meeting are mere days away,” he declares, “followed by the BoJ press conference on December 19-a monumental event for the dollar, yield curves, and yen carry trade fears.” In another post, he emphasizes, “The JP10Y continues to climb. This is no trifle, my friends!” Japanese yields rise, adding pressure on the BoJ to act.📈
BitMEX founder Arthur Hayes ties this macro drama directly to Bitcoin’s recent plunge. “BTC dumped because the BOJ teased a December rate hike,” he argues. “USDJPY at 155-160 makes the BOJ hawkish.” He frames the sell-off not as a crypto-native event, but as a funding shock.💥
As December unfolds, futures and economist surveys suggest an 80-87% chance of a Fed cut at the December 9-10 meeting, despite the committee’s divisions. Meanwhile, the BoJ hints it will “consider the pros and cons” of a hike at its December 18-19 meeting, with markets pricing in tightness and 10-year JGB yields near multi-decade highs.📊
This combination-Fed easing expectations plus BoJ tightening risk-poses a grave threat to the yen carry trade. A repeat of July 2024’s pattern seems plausible: Bitcoin and other risk assets suffer a sharp sell-off, followed by a bottom once forced deleveraging runs its course.🎭
At press time, BTC traded at $92,235.🎢
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2025-12-05 11:14