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

Just look at these data points: Japan’s 2-year government bond yield soared to its highest level since 1996, and the 10-year breakeven inflation rate surged to its peak in 2004. These are not just numerical changes; they indicate that market expectations have been completely reversed. Many will ask: Japan keeps tinkering, can its influence compare to that of the Federal Reserve? Absolutely not. Japan is the third-largest economy in the world, holding the position of the largest creditor globally. 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 returns everywhere, with a continuous flow into the crypto market. These liquidity injections have artificially supported digital asset prices. Now, once the reverse operation is triggered, these funds will flock back to Japan. Global liquidity will suddenly tighten, and high-risk assets like cryptocurrencies are likely to be hit hardest, 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 violent fluctuations.