On December 1, 2025, Bank of Japan (BOJ) Governor Kazuo Ueda hinted at a potential interest rate hike at the December 18-19 meeting, citing risks of sharp inflation if delayed, per . This caused Japan’s 2-year bond yield to surge to 1.01%, the highest since 2008, sparking a risk-off sentiment and unwinding of the yen carry trade, per . Bitcoin (BTC) plunged nearly 6% to $85,778, erasing recent gains and entering bear market territory (down 32% from October’s $126,251 peak), per . Ethereum (ETH) and altcoins followed, with the crypto market cap dropping 3.5% to $3.8T.
The BOJ’s pivot from decades of ultra-loose policy lifted yen strength and bond yields, forcing investors to unwind leveraged positions funded by cheap yen borrowing, per . This triggered $150M in BTC long liquidations and $1B in total crypto deleveraging on December 1, per . Arthur Hayes, former BitMEX CEO, linked the drop to BOJ’s rate signals reversing loose policy and impacting USD/JPY, per . X posts from @xwinfinance note suppressed BTC due to BOJ expectations and derivatives unwind, per [post:1]. ETH fell to $4,070, testing $4,200 support.
The sell-off spread to stocks, with Nasdaq futures declining and global assets hit, per. Spot BTC ETFs saw $3.5B outflows in November, exacerbating the dip, per Experts like Rachael Lucas highlight crcrypto’sew sensitivity to non-Fed central banks, per. Historical patterns show similar sell-offs during macro shifts, per XRP and Solana (SOL) dropped 5-7%, with the Fear & Greed Index at 24 (extreme fear), per X user @varungypsy reports BTCBTC’s first day since early November.
BTC support at $84,000–$80,553 is critical; a break could test $74,508, per. A confirmed BOJ hike could deepen the carry-trade unwind, pressuring risk assets further. Conversely, dovish Fed signals at Jackson Hole (August 22) may spark a rebound, targeting $90,000, er. Investors should watch the BOJ meeting (December 18-19) and FOMC minutes, per. Dollar-cost average BTC with stop-losses below $84,000, or diversify into USDC, per TradingView. Follow @TheBlock__ on X for updates. This event underscores crypto’s ties to global policy.
