The game rules of global interest rates are being rewritten. The Federal Reserve is still signaling rate cuts, while the Bank of Japan suddenly changed course, pushing its policy rates to a 30-year high. From this moment on, the two major economic engines have started to play a tug-of-war, and the crypto market, like a sensitive barometer, has begun to shake violently.

Looking at these data points makes it clear: Japan’s 2-year government bond yield soared to its highest level since 1996, and the 10-year breakeven inflation rate hit a peak not seen since 2004. This is not just a numerical change; it indicates that market expectations have completely reversed. Many will ask: Can Japan’s continued actions influence as much as the Federal Reserve? Absolutely not. Japan is the world’s third-largest economy and holds the position of the largest global creditor. Once its policy shifts, global capital flows will be rewritten.

The story of the past thirty years is like this: Japan’s low-interest environment has driven funds to seek yields everywhere, with some continuously flowing into the crypto market. These liquidity inflows have supported the prices of digital assets. Now, once the reverse operation begins, these funds will flood back into Japan. Global liquidity will suddenly tighten, and high-risk assets like cryptocurrencies are most likely to be hit hard, becoming prime casualties.

This may not be the impact of a single event but a sustained tidal shift of capital. Recognizing this trend early is crucial to prepare for the market’s intense volatility.