What do you all think?

Here’s a harsh truth: if Japan really raises interest rates, Bitcoin is very likely to be the first to suffer.

Why? Because the yen has long played the role of the world’s “ATM” for global capital. Over the past few years, investors have been frantically borrowing yen at almost zero cost, then turning around and pouring it into US Treasuries and cryptocurrencies—places where they can earn a spread. This strategy is called carry trade; at its core, it’s about exploiting the Bank of Japan.

But the game rules are about to change. Once the Bank of Japan actually raises rates, the cost of financing in yen will skyrocket, and the free lunch suddenly comes with interest payments—who would want to keep playing then? The smart money’s first reaction will definitely be to close positions and get out fast.

The most critical transmission channel is via US Treasuries. Japan is the number one foreign holder of US Treasuries, sitting on $1.189 trillion as of September 2025. Right now, yields on Japan’s 10-year government bonds have soared to 1.8%, the highest since 2008—under these conditions, why would capital take on FX risk to hold US Treasuries? Isn’t it more attractive to just sell those and switch back to Japanese government bonds?

This is where the problem lies: if Japanese capital exits the US Treasury market on a large scale, supply will instantly surge, bond prices will plunge, and US Treasury yields will inevitably soar. What does this mean? The cost of borrowing dollars globally goes up across the board, liquidity starts to tighten, and all risk assets need to be repriced.

And Bitcoin just happens to be the most fragile among risk assets. It has no cash flow support, extremely high volatility, and when a liquidity crisis hits, it’s almost always the first asset institutions dump for stop-losses. Carry trades collapse → US Treasuries are sold off → liquidity dries up → Bitcoin crashes. This logic chain couldn’t be any clearer.