The Bank of Japan last night raised interest rates by 25 basis points as scheduled. Will this move trigger a surge in the crypto market? To sum up: it’s most likely to pass smoothly. In plain terms, this rate hike is "mild to the point of having no temper," with limited impact on mainstream cryptocurrencies.

The key lies in understanding the central bank’s true intentions. On the surface, it’s raising rates, but the central bank has explicitly stated that "real interest rates will remain at very low levels"—this is a reassurance signal, not a sign of a rapid shift. It’s just a slight adjustment in pace. As for future policies, the central bank’s wording is "if the economy and prices meet expectations, interest rates will continue to be raised," which translates to more rate hikes ahead, but at a slower pace, following an incremental approach, not aggressive tightening.

Does this have a big impact on our crypto investments? The most critical variables are carry trade activities and the USD/JPY exchange rate. The previous logical chain was: BOJ rate hike → USD/JPY fluctuation → impact on carry trade volume → direct influence on market liquidity. If the USD/JPY remains stable, the retreat of carry trades won’t be too fierce, and market liquidity won’t shrink significantly. Crypto markets are very sensitive to liquidity changes, which is crucial.

According to the latest CFTC data on JPY positions, market sentiment remains relatively stable, with no signs of panic-driven position swings. This also supports the conclusion: this rate hike doesn’t have a substantial impact on the market. We’ll need to keep an eye on a few variables...