What truly influences Bitcoin is not the Federal Reserve.

Currently, the market is focused on the Fed's rate cut pace and inflation data, but what can genuinely change the flow of global capital is Japan, which has been overlooked.

The Bank of Japan is about to start raising interest rates. Don't be fooled by the small 0.25 percentage point increase; this is not just a normal rate adjustment but a major shift away from decades of easing policies.

The key is not how much they raise rates but who is raising them. The Fed's rate hikes are now familiar, but Japan is different—its near-zero interest rates for a long time have made the yen the cheapest financing currency globally. Over the past few decades, global capital has been borrowing low-interest yen to buy stocks, real estate, and high-yield risk assets like Bitcoin—this is yen arbitrage trading. This strategy has quietly added hidden leverage to global risk assets but is rarely discussed as a core factor.

This time, it's different. The BOJ's rate hike directly undermines the foundation of arbitrage trading: the yen will appreciate, borrowing costs will rise, leverage becomes unprofitable, and large amounts of capital will be forced to close positions passively. These liquidations are purely mechanical operations after the rule change, without emotional or fundamental analysis.

Why does the crypto market always suffer first? Because assets like Bitcoin are highly liquid, traded 24/7, and extremely sensitive to capital flows. When risk appetite shrinks, stock markets and credit markets respond slowly, making crypto assets the easiest "capital exit" point.

What does this mean? Even a small rate hike by the BOJ shakes the foundation of low-cost global funds. In the short term, the prices of risk assets will fluctuate due to capital withdrawal, but this is just a liquidity-driven adjustment, not a collapse in the assets' intrinsic value.