Poised for a 25 basis point rate rise to 0.75% at its December 18–19, 2025 meeting, marking a 30-year high and continuing the shift from ultra-loose policy amid firming inflation and wages, the Bank of Japan (BOJ) Markets price in 90-98% odds for this move, following a previous hike to 0.5% in January 2025, with signals toward a 1% rate in 2026 and talks of a neutral rate around 1-1.25%.
Through increased prices for yen-funded carry trades and yen appreciation, this tightening could spread into Bitcoin (BTC), therefore causing global risk asset deleveraging. Historical BOJ hikes in March and July 2024, as well as January 2025, corresponded to 20–31% BTC drawdowns triggered by liquidity shocks instead of crypto-specific causes.
Near-term Bitcoin indicators reveal some de-risking via increased exchange inflows and softer financing, yet the risks are tilted down. Particularly if BTC hovers near highs, traders should lower leverage or hedge with shorts/puts surrounding the event; a possible 20–30% selloff could provide medium-term buying possibilities after yen pressures abate.


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