Have you noticed that recently the trend of Bitcoin is almost in step with the Japanese Yen?

Behind this actually lies a set of arbitrage strategies. In the past, the yen interest rate was close to zero, and borrowing money was almost free. Many institutions crazily borrowed yen, exchanged it for dollars, and then invested it in high-yield assets like BTC—this is the classic yen arbitrage trade.

But now the script has changed. The Bank of Japan has begun to tighten monetary policy, and the interest rate hike has caused the cost of borrowing yen to rise sharply. Those institutions have to operate in reverse: selling Bitcoin to exchange for dollars, and then converting back to yen to pay off debts. The yen is being bought in large quantities, strengthening the exchange rate; BTC is facing concentrated selling pressure, and its price is under pressure as a result. The synchronization of the two is how it came about.

To put it bluntly, Bitcoin is no longer an independent kingdom; it has deeply involved itself in the game of global capital flow. The biggest hidden danger right now? It is the stampede-like withdrawal of yen arbitrage funds. The scale of this money is not to be taken lightly; if it continues to flee, the market may face a hard landing.