Bank of Japan Rate Hike Triggers Yen Carry Trade Unwind, Impacting Bitcoin (BTC) Price

The Bank of Japan's (BOJ) historic shift away from negative interest rates is sending shockwaves through global markets, with Bitcoin (BTC) facing significant pressure. This policy change has initiated a massive unwind of the popular "yen carry trade," where investors borrowed cheap Japanese yen to invest in higher-yielding assets like cryptocurrencies. As the yen strengthens due to higher rates, these leveraged positions are being rapidly closed, leading to a sell-off in risk assets, including Bitcoin. Analysts warn that this macroeconomic shift could increase volatility for BTC and the broader crypto market as capital flows reverse. The situation highlights Bitcoin's growing sensitivity to traditional finance and central bank policies, marking a critical test for its role as a risk-on asset.