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"On December 19, the Bank of Japan could trigger a massive Yen carry trade unwind worth up to $4 trillion — and history shows Bitcoin and risk assets don’t escape unscathed.
In this video, we break down what the Yen carry trade is, why it matters, and whether this move could spark a sharp sell-off or a major buying opportunity."
~ Coin Bureau
The video discusses the potential impact of a Bank of Japan interest rate hike on the cryptocurrency market, specifically focusing on the yen carry trade. This trade involves borrowing money at low interest rates in Japan to invest in higher-yielding assets like Bitcoin and US tech stocks, a strategy that faces a liquidity shock as Japanese rates rise and the yen strengthens. While historical rate hikes have led to significant Bitcoin price drops, the speaker notes that the current market has largely priced in the expected hike, and the Federal Reserve’s ongoing liquidity injections may act as a counterforce. Ultimately, the video advises investors to expect high volatility around December 19th and suggests avoiding high leverage while remaining prepared for potential buying opportunities if a sharp market dip occurs.
00:00 BoJ Rate Hike & Global Liquidity Shock
01:30 What the Yen Carry Trade Is
02:47 December 19 BoJ Rate Hike Catalyst
03:38 Why Yen Strength Hurts Bitcoin
07:40 Bitcoin Price Targets & Trading Strategy
Source - Coin Bureau YouTube: https://www.youtube.com/watch?v=dCkbF_4tDcU
Disclaimer: This video is provided for informational purposes only, and not offered or intended to be used as legal, tax, investment, financial, or any other advice.
