#数字资产市场洞察 The Bank of Japan's recent move is quite aggressive. Starting in 2024, for the first time in 17 years, they officially raised interest rates, directly halting the ultra-loose monetary policy.

The timeline is as follows: in March, the 8-year negative interest rate ended, with the policy rate rising from -0.1% to 0~0.1% — the market reaction was relatively stable, with Ethereum dropping about 5-10% in the short term. But in July, it got intense — a 25bp rate hike to 0.25% and the announcement of balance sheet reduction, completely exceeding expectations. Global risk assets exploded instantly, and Ethereum's price plummeted from around $3,300 to near $2,100 in just over three days, a decline of over 35%. By January 2025, the central bank raised rates another 25bp, bringing the rate to 0.5%. After that, Ethereum didn't calm down, with continuous large red candles of 6-8%, accumulating about a 30% drop over a week. Bitcoin also fell 31% during the same period.

Why is the central bank's rate hike so deadly to the crypto market? It all comes down to one word: Yen. Rate hikes push the yen higher, and those positions that rely on borrowing yen to speculate on high-risk assets are forced to close out. Large amounts of capital exit the crypto market, triggering this chain reaction.

Now we're at a critical point. By mid-December, the policy rate is still at 0.5%, but everyone is waiting for the December 18-19 meeting, with widespread expectations of a further increase to 0.75%, which would hit a 30-year high. Currently, cryptocurrencies have already been hammered; Ethereum has fallen below $3,000, and Bitcoin has returned to around $80,000.

Honestly, Japan's rate hike cycle has become the most core systemic risk for the crypto market in 2024-2025. Every rate hike clearly results in a 20-35% correction, which is hard to avoid. The short-term volatility will continue, and you need to keep a close eye on the linkage between the yen exchange rate and global liquidity.
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