BoJ Hikes to 1%, Bitcoin Unfazed as Playbook Changes
The Bank of Japan raised rates to 1.0%, yet Bitcoin remained near $66k, contrasting the sharp drop in August 2024. Four factors explain why the impact was muted this time.
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The Bank of Japan hiked 25 basis points to 1.0% today, the highest since September 1995. Despite the move, the Nikkei 225 surged past 70,000 for the first time, USD/JPY held above 160, and Bitcoin barely flinched at ~$66k. In August 2024, a similar-sized hike sent BTC from $65k to $50k in a week.
Four reasons this playbook broke:
- Hike was priced in: Polymarket odds sat at 98–99% before the meeting.
- Carry trade structure changed: Net JPY shorts collapsed from ~180k to flat in five weeks during the 2024 unwind. Today’s 145k shorts are extreme, but hedged carry has been negative since mid-2022.
- BTC already low: Price is 50% off October highs, and $4.4B in ETF outflows over 13 sessions cleared out leverage.
- Real rates are deeply negative: The carry trade is no longer the marginal driver for Bitcoin.
Source: Cointelegraph