Bitcoin’s slide intensified as a strengthening yen squeezed carry trades and triggered swift deleveraging across crypto, revealing how shifting expectations for Japan’s policy path can jolt digital assets, a pattern emphasized by Arthur Hayes.
Why Is Bitcoin Dumping? Arthur Hayes Tracks BOJ Heat Closing in on BTC
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Bitcoin Slides With Rising Yen Costs as Carry Trade Tension Builds
Global crypto markets faced renewed turbulence as Bitmex co-founder and Maelstrom CIO Arthur Hayes explained on social media platform X on Dec. 1 his assessment of why bitcoin had dropped below $85K.
He explained that bitcoin dumped because traders believed the Bank of Japan (BOJ) had shifted a potential December rate hike into focus, and that a USD/JPY move into the 155–160 area signaled a more hawkish stance from policymakers. As of writing, BTC is trading at $84,966.
His view suggested that yen appreciation raised the cost of yen-funded leverage, pressuring investors who relied on the carry trade. As the yen strengthened, leveraged crypto positions became harder to sustain, prompting swift deleveraging across high- volatility assets.
Read more: Arthur Hayes Sees Bitcoin Defending $80K as Fed QT End Sparks High-Stakes Flow Pivot
Hayes has frequently connected bitcoin’s price behavior to the monetary policy of the Bank of Japan, emphasizing the role of the yen carry trade in shaping global liquidity conditions. Market indicators showed overnight swap rates placing a 76% probability on a December tightening, underscoring ongoing sensitivity to Japanese policy shifts.
Nearly $1 billion in leveraged cryptocurrency positions were liquidated Monday during a sharp price decline, highlighting the spillover effects of a stronger yen even as U.S. Federal Reserve communication leaned dovish. Pro- crypto analysts argued that while macro shocks can trigger sharp volatility, long-term demand drivers for bitcoin may strengthen once forced selling abates.
FAQ ⏰
- Why did bitcoin fall to the $85K level?
Arthur Hayes attributed the drop to trader expectations of a potential Bank of Japan policy shift and resulting deleveraging. - How did USD/JPY movement factor into bitcoin’s decline?
A move toward the 155–160 range signaled a more hawkish stance that pressured yen-funded crypto positions. - How much crypto was liquidated during the deleveraging?
Nearly $1 billion in leveraged cryptocurrency positions were liquidated Monday during a sharp price decline. - What long-term outlook did analysts express for bitcoin?
Analysts said forced selling may fade, potentially strengthening long-term demand for bitcoin.
