On December 19, 2025, at 11:00 AM, the Bank of Japan announced the end of its negative interest rate policy, a message that immediately caused a stir in the global capital markets. The Nikkei index dropped by 2.3% in response, but the real shock came from the crypto market—Bitcoin plummeted 8% within five minutes, Ethereum's decline exceeded 12%, and margin call alarms in the futures market rang nonstop.

This is not just a simple interest rate adjustment. For the crypto world, it marks the end of an era—the ecosystem sustained for a decade by "cheap money" is facing a fundamental transformation.

**Why must Japan raise interest rates?**

The Bank of Japan's move was forced. Over the past two years, Japan's core CPI has exceeded the 2% target for 24 consecutive months, with inflationary pressures continuing to rise; the yen has been steadily depreciating, import costs soaring, and the cost of living for ordinary people increasing. Meanwhile, major central banks in the US and Europe have already entered a high-interest rate cycle. If Japan continues to stand still, it will only accelerate capital outflows. The narrowing of the US-Japan interest rate differential provided an opportunity for policy adjustment, making this shift an inevitable choice.

**The invisible support in the crypto world is collapsing**

Over the past decade, Japan's ultra-low interest rates have fueled the prosperity of global risk assets. Hedge funds have exploited yen carry trades, channeling大量廉价资金流入新兴市场和高风险资产，cryptocurrency is the biggest beneficiary of this liquidity dividend. When this "invisible wet nurse" stops supplying, both institutions and retail investors will need to reassess risk-reward ratios. In the short term, capital will inevitably face reallocation, which also explains the sharp decline.

The upcoming market trend depends on how the market digests this policy shift.