ATTENTION 🚨
JAPAN CAUSED THE #BITCOIN FLASH CRASH 😱
Yesterday, $BTC plummeted by more than $4,000 in just one hour, and the crypto market lost around $150 billion in capitalization.
In addition, more than $600 million in leveraged positions were liquidated.
🔥 What triggered the crash?
🇯🇵 The Bank of Japan (BOJ) abruptly shifted from a “calm” message to a 76% probability of raising interest rates on December 19.
As a result, the yield on 2-year Japanese bonds rose to 1.84%, its highest level since 2008.
⚠️ Why does this affect #Bitcoin and the crypto market?
🔹 Japan maintained interest rates at 0% for decades
🔹 This allowed for massive yen-denominated loans, exceeding $20 trillion
🔹 Investors used these cheap yen to invest in higher-yielding assets → Yen Carry Trade
👉 If Japan raises interest rates, the carry trade breaks down.
Investors reduce risk, sell assets, buy back yen, and this puts pressure on global markets, including crypto.