On December 19th, a financial震荡 is spreading from Tokyo to the world. The Bank of Japan plans to raise interest rates from 0.50% to 0.75%—a level not seen in Japan for nearly 30 years.

What does this shift mean? It signals the end of a decades-long arbitrage feast. Countless funds borrowed yen at nearly zero cost to exchange for dollars and bet on high-risk assets like Bitcoin. Now, this easy win is about to be blocked.

The market has already given the answer. On December 15th, Bitcoin plummeted from $90,000 to $85,616, a drop of over 5% in one day. Less than 48 hours before the Bank of Japan’s decision, global traders are watching this meeting closely.

Currently, Bitcoin hovers around $86,000, down more than 30% from its all-time high two months ago. But this is not the worst-case scenario. The real test will come after the rate hike announcement—recently, the US Bitcoin ETF experienced a net outflow of $357 million in a single day.

Looking at history, the last time the Bank of Japan raised interest rates in July 2024, Bitcoin dropped from $65,000 to $50,000 within a week, a decline of 23%. Will history repeat itself? Market anxiety is written all over traders’ faces. This rate hike not only influences Bitcoin’s movement but also signals a subtle shift in the global liquidity landscape.