Japan's Rate Hike and the Crypto Market: Short-Term Battles Amid Expectation Absorption

Overall, the impact of the Bank of Japan's rate hike on the crypto market is not simply "insignificant" or "huge," but a complex and dynamic process. Its effects mainly depend on the extent of market expectation absorption, the hedging effects of monetary policies in other major global economies, and the market's own leverage levels.
Key Points: Expectation Absorption 98%
Market Rate Hike Expectation 28%
Bitcoin Trading Volume Decline
Market Expectations Fully Absorbed, Limited Short-Term Impact

Before the Bank of Japan announced the rate hike on December 19, 2025, market expectations were already very strong. According to data from the prediction market platform Polymarket, the market generally believed the probability of a rate hike was as high as 98%. This means most investors had already priced in this factor, resulting in no panic selling after the announcement and a relatively stable reaction. As early as December 15, prior to the announcement, Bitcoin prices had already experienced a slight decline, and trading volume had significantly decreased, reflecting cautious sentiment among investors under expectations.
Historical Experience: Short-Term Downward Pressure After Rate Hikes

Although this rate hike expectation has been absorbed, historical data shows that Japan's rate hikes typically bring short-term downward pressure to the crypto market. This is mainly achieved through the reversal of "Yen Carry Trade" arbitrage.
Historical Bitcoin Declines Post-Rate Hike
January 2025 Rate Hike
Interest rate increased to 0.5%, Bitcoin price dropped approximately 31.89%.
July 2024 Rate Hike
Interest rate increased to 0.25%, Bitcoin price dropped approximately 26.61%.
March 2024 Rate Hike
End of negative interest rates, interest rate increased to 0%-0.1%, Bitcoin price dropped approximately 23.06%.
Global Macro Hedging: The "Buffer" of Fed Rate Cuts

Another key reason why the impact of this rate hike might be relatively mild is that the U.S. Federal Reserve (Fed) has adopted opposite easing policies during the same period. In 2025, the Fed has consecutively cut interest rates, bringing them to a three-year low. This "Japan tightening, U.S. easing" policy divergence provides some liquidity support to the global markets, potentially offsetting the tightening effects of Japan's rate hike to some extent.
Current Market Status: Leverage Levels Decreasing, Risks Easing

Before the rate hike announcement, the overall leverage level in the crypto market had already decreased. Wintermute's analysis on December 2, 2025, indicated that the market had entered a potential consolidation phase, with vulnerabilities in mainstream assets diminishing. This suggests that prior to the rate hike, the market was in a relatively cautious state and may not immediately trigger a large-scale leverage liquidation wave.
Summary and Outlook

In summary, the impact of the Bank of Japan's rate hike on the crypto market exhibits the following characteristics:
Short-Term Impact: Since expectations have been fully absorbed and global macro hedging factors exist, the short-term shock from this rate hike may be smaller than historical hikes.
Medium to Long-Term Risks: If the Bank of Japan continues to raise rates or the yen further appreciates significantly, it could lead to a more pronounced tightening of global liquidity, posing greater downward pressure on the crypto market.
Key Observation Points: Future focus should be on the rate hike trajectory of the Bank of Japan, the trend of the yen exchange rate, and the coordination of monetary policies among major global economies. #参与创作者认证计划月领$10,000 #参与创作者认证计划月领$10,000 #Gate广场 #成长值抽奖赢金条和精美周边