Recently, former Bank of Japan Deputy Governor Masazumi Wakatabe spoke out, advising the central bank not to rush into raising interest rates and to avoid tightening monetary policy too aggressively. Does this sound like a distant matter? Actually, not at all.

As the last major economy worldwide to maintain negative interest rates, any policy signals from Japan can trigger large-scale capital flows seeking arbitrage opportunities globally. Once Japan changes direction, hundreds of billions of dollars in yen arbitrage funds will flood back, further strengthening the US dollar, and global liquidity will tighten accordingly. Risk assets—including your Bitcoin and Ethereum—will face withdrawal pressures.

Wakatabe suggested initially using fiscal policy to raise the neutral interest rate level. This statement actually signals that a rate hike cycle is inevitable; it’s just a matter of time. They are waiting for the right window, for fiscal measures to take effect, for market adaptation to improve, and then to shift suddenly.

We see many market participants still blindly chasing small coins, buying the dip and selling on rallies, believing the bull market has no end. But the real risk is often not the sudden crash, but this gradual policy shift. By the time you feel the pain, it’s already hard to escape.

From another perspective, the evolution of central bank policies should not be ignored. Positioning and allocation are more important than anything else. Avoid frequent all-in bets, keep enough stablecoins in hand, so you have the confidence to buy the dip when opportunities arise. Be alert to signals of liquidity tightening; if Japan truly begins to tighten, small-cap coins will be the first to bear the brunt.

Market opportunities are never scarce; what’s scarce is participants who can survive until the next opportunity. The words from the Bank of Japan are not meant to comfort but to remind: before the storm arrives, check whether your defenses are strong enough. Staying calm and operating rationally are key to surviving long-term in this market.