#美联储降息 The Bank of Japan's interest rate hike at the December 18-19 monetary policy meeting has become almost certain.

Let's start with the hard data: the policy interest rate is planned to be raised from 0.5% to around 0.75%, an increase of 25 basis points. If confirmed, this will be the highest level since September 1995. The Bank of Japan Governor Ueda Kazuo's recent comments about weighing the "pros and cons" of a rate hike at the December meeting have been interpreted by the market as a strong signal—probability of a rate hike has soared to over 80%. Coupled with the Japanese government’s expectation to agree on this decision, political resistance is basically nonexistent.

Why is this event so crucial for cryptocurrencies like $BTC, $ETH, and $SOL? The core reason lies in a set of arbitrage mechanisms.

For a long time, global investors have been borrowing yen and exchanging it for dollars to invest in high-yield assets like U.S. stocks and cryptocurrencies. Japan's ultra-low interest rates have facilitated this arbitrage. But once Japan enters an interest rate hike cycle, the game changes—the cost of yen financing rises, and the yen may appreciate. Investors using leverage are forced to close their positions, selling risk assets and buying back yen to repay debts.

More importantly, this forced liquidation pressure has already begun to emerge. After Ueda Kazuo signaled in early December, Japanese government bond yields surged to multi-year highs, the yen appreciated, and cryptocurrencies like Bitcoin also experienced significant declines. This is no coincidence; it is a direct reflection of the closing of arbitrage positions. As one of the most sensitive areas to global liquidity, the crypto market bears the brunt of this adjustment.