The Bank of Japan just announced a 25 basis point rate hike, pushing the yen interest rate to a 30-year high. On the surface, this appears to be an adjustment in Japan's economic policy, but in reality, it’s already a blow to the entire crypto market.

However, there is a key point that must be understood clearly: the short-term shockwave has already passed; only the aftershocks are continuing. We are now entering a new phase—the game of "buy the expectations, sell the facts."

Why does the decision of the Bank of Japan drag down the crypto circle? The reason is quite straightforward. Over the past decade, global hot money has been playing the same game: borrowing yen at low cost, then converting to USD to buy US stocks and Bitcoin. Once this arbitrage chain breaks, funds can only escape risk assets, converting back to yen to pay off debts. Historical records show that after the first three rounds of rate hikes by the Bank of Japan, Bitcoin usually retraced 20% to 30% within 4 to 6 weeks.

So the question is—has the worst case already happened? It’s very likely that some of the shock has already played out in advance. This rate hike is almost a certainty (with near 100% confidence), and those with keen senses have already started to withdraw. The high jump and ETF fund outflows you see are essentially the market digesting this negative news ahead of time.

This leads to the next question: the "landing" effect. When bad news actually hits with certainty, it might not be as easy to continue falling.

Which two signals should we focus on next?

First is the movement of the yen. If the yen strengthens in the short term and then falls back, it indicates limited pressure to close arbitrage positions, which is actually positive for risk assets. Conversely, if the yen continues to appreciate strongly, it means funds are really fleeing on a large scale.

Second is the attitude of the Bank of Japan in the coming period. If their signals are "let’s see after this rate hike," leaning dovish, that’s good news for the market. But if they start hinting that "interest rate hikes may continue next year," then the trouble is just beginning.

Ultimately, the move by the Bank of Japan has already been made, and its impact may have been partially absorbed by the market in advance. Now is not the time to panic; instead, it’s a moment for heightened focus and careful observation. The turning point that can truly change the situation often appears—at the moment when everyone’s pessimistic expectations are sharply denied by reality.