Japanese Bond Yields Hit Record Highs, Posing Risks for Bitcoin
The cryptocurrency market is experiencing a major correction as Japanese bond yields reach unprecedented levels since 2008. The yield on Japan’s 20-year government bond has climbed to 2.265%, its highest level since the global financial crisis, signaling a possible interest rate hike by the Bank of Japan (BoJ).
A Growing Macroeconomic Pressure on Bitcoin
The increase in Japanese bond yields often indicates a reduction in risk appetite, a worrying sign for Bitcoin, which is often treated as a speculative asset. A rate hike by the BoJ could lead to a strengthening of the yen, making carry trades – where investors borrow in yen to invest in riskier assets like BTC – less attractive. This dynamic had already triggered a sell-off in stock and crypto markets in August 2024, a scenario that could repeat itself.
A Perfect Storm for a Correction
In addition to Japanese monetary policy, several factors are weighing on Bitcoin:
- Persistent trade tensions: Trump’s trade war is affecting capital flows and increasing risk aversion.
- The caution of the Federal Reserve: The Fed remains cautious about potential interest rate cuts in 2025, limiting support for risky markets.
- A lack of positive catalysts: After Bitcoin’s strong rally in recent months, the market lacks new growth drivers despite the announcement of a national reserve.
Towards a Long-Term Recovery?
While current tensions hinder the rise of Bitcoin, investors remain on the lookout for a turnaround in global monetary policy. Indeed, a reduction in trade tensions and a resumption of Fed rate cuts could reignite a bullish trend towards new all-time highs.
Until then, Bitcoin could experience significant turbulence, testing critical thresholds once again before potentially resuming its ascent.
