An Alternative Perspective from a Cryptocurrency Market Analyst

Background Story: A Century-Long "Reduction Relay"

The Bank of Japan recently announced a major news—starting next month, it plans to gradually sell off ETF holdings worth 83 trillion yen (approximately $5.34 trillion). It sounds intimidating, but the approach is actually quite "zen": only selling 330 billion yen per year, meaning this reduction will take over a hundred years to complete.

Governor Ueda Haruhiko was straightforward: "We don't want to disturb the market." The logic behind this statement is quite revealing—since the BOJ is the largest single shareholder of Japanese stocks, holding about 7% of the total market value. If it were to sell off a large portion in a short period, it could easily trigger a collective sell-off and chain reactions that no one could control. But don't underestimate the significance of this "slow" approach—it marks a real reversal of the ultra-loose policies started in 2010, and this shift carries more weight than short-term volatility.

To put it simply: it's like holding a large amount of Bitcoin but deciding to sell only a little each day to avoid crashing the market. On the surface, the market appears stable, but everyone knows that the BOJ will eventually continue to sell, and this expectation alone creates psychological pressure.

Two Major Hidden Dangers in the Market: Why Should We Be More Cautious of This "Slow Knife"?

First, the illusion of liquidity support is fading

The BOJ has been buying ETFs for over a decade, essentially using its printing power to backstop the stock market. Now, as it gradually withdraws, although the annual reduction is less than 0.5% of market liquidity, the signal it sends is clear: "If the market falls in the future, don't expect me to step in and rescue." This shift in psychological expectation will force long-term liquidity-dependent institutions to reassess the value of risk assets—especially overvalued tech stocks and real estate investment trusts.

Second, the "butterfly effect" of the global capital chain is brewing

Once the BOJ's reduction signals are confirmed, international capital may reevaluate the risk premium across the Asia-Pacific region. During this process, cross-border capital flows that rely on a weak yen and low interest rates will inevitably adjust—and this will also impact global assets like Ethereum and Bitcoin.