Recently, everyone in the square is talking about Japan's interest rate hike, and a bunch of people in the comments are asking: what does this have to do with the crypto world?

To be honest, the relationship is quite significant. If Japan really starts a rate hike cycle, the entire crypto market may have to prepare for a winter.

Why do you say that? Three key points:

**First, the cheapest money in the world is going to disappear**
In the past decade, the Japanese yen interest rate has been close to zero, and a large amount of capital has been borrowed in yen to speculate on global assets—U.S. stocks, real estate, and of course, including crypto world. With Japan's interest rate hike, this cheap capital needs to be repaid, which is equivalent to draining blood from the global market.

**Second, once the carry trade shrinks, risk assets will cool down**
Many people may not know that behind many surging markets, there is often Japanese yen carry trade funding playing a role. When the funds withdraw, the hot money disappears, and the market naturally cools down, even turning directly to decline.

**Third, Japan is the second largest bond market in the world and the largest overseas investment exporter.**
As soon as they slightly tighten external investment, global liquidity becomes immediately tight; is it difficult to maintain asset prices? Yes.

In short, if Japan really starts raising interest rates, whether the crypto world can withstand this wave of market changes is a big question mark😀😀