$BTC Holds $87,800 as Japan Signals Rate Hike


$BTC traded at $87,800 as the Bank of Japan prepared to conclude a two-day policy meeting expected to result in the second interest rate increase this year. The Japanese central bank signals continued monetary policy normalization into 2026 despite political and economic pressures.


The #cryptocurrency declined nearly 30% from its Oct. 6 peak of $126,080. Markets anticipate the rate decision on Friday will keep borrowing costs low by global standards while pledging further hikes ahead.


A rate increase in the world's fourth-largest economy threatens to unwind the yen carry trade that has provided #liquidity to global risk assets. The strategy involves borrowing Japanese yen at near-zero rates and investing in higher-yielding U.S. dollar assets.


Czhang Lin, head of LBank Labs, said the Bank of Japan's rate hike normalizes the yen and unwinds carry trade fuel that has supported global risk assets for years. The environment flips liquidity from expansion to contraction.

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December 17, 2025 at 7:10 PM
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