The Bank of Japan is serious this time—it directly raised interest rates to 0.5%, marking a complete end to the negative interest rate era. This is no joke; global liquidity tightened instantly.

To put it simply, the yen carry trade no longer works. Previously, everyone was frantically borrowing yen (at almost zero cost), converting it into dollars, and diving into high-risk pools like Bitcoin to make money. That’s how the bull market was built. Now? Borrowing costs have soared, arbitrage opportunities have shrunk, and capital is retreating faster than a rabbit. Bitcoin dropped over 20% in a week, with more than 10% of its market value wiped out.

The crypto market is already a leverage maniac, so with this wave of panic, volatility has gone off the charts. Ethereum, SOL, and other altcoins have taken an even bigger hit.

Looking ahead? In the short term, global risk-off sentiment is dominating. Even if the Fed cuts rates, it won’t be enough to withstand the pressure from yen repatriation. December will likely continue to be choppy and tough. But looking at the bigger picture, it’s not necessarily a bad thing—once the yen stabilizes, demand for safe havens will cool, and crypto, as an inflation hedge, might get a window for a rebound.

What should you do now? Control your positions and keep a close eye on the Bank of Japan’s next move. Winter is almost over; you can’t rush a bull market—you have to endure.