Does a BOJ rate hike spell trouble for crypto? The viral chart suggests it does, but that narrative oversimplifies what actually happened.

Last year's crypto pullback coincided with the Bank of Japan's policy shift, yet the real culprit was something more specific: the unwinding of yen carry trades. When rates climbed and the yen strengthened, leveraged positions built on cheap JPY funding collapsed. That forced liquidation created acute downward pressure.

But here's the nuance—a rate hike itself isn't inherently bearish for digital assets. What matters is the broader macro context: Fed policy, global liquidity conditions, and whether the move signals economic tightening or merely closing an anomaly gap.

The 2024 move was largely the latter. Markets were correcting an unsustainable carry trade structure rather than responding to fundamental rate policy. Understanding that distinction matters for positioning going forward.