Recently, an important signal has emerged in the global financial markets, worth the attention of crypto investors. The abnormal movements in Japan's bond market are no longer isolated incidents but a shockwave affecting the entire asset market.

Let me first clarify the background. Over the past few decades, Japan has played the role of a "cheap funding provider" in the global financial system. Due to a long-term zero interest rate policy, many international institutions have engaged in carry trades by borrowing yen at low costs to invest in higher-yield assets. This practice has been widespread across the global investment community. However, this situation is rapidly changing.

The latest data clearly illustrate the issue: the yield on Japan's 10-year government bonds has risen to 2.14%, the highest level in 27 years since 1999. The Bank of Japan has convened an emergency meeting to try to stabilize the market. The severity of the problem lies in the fact that the bond market, once implicitly guaranteed by the central bank, is now beginning to lose buyers, while Japan's government debt has already exceeded 240% of GDP. Interest payments are rising rapidly, but government revenue growth cannot keep pace. From a mathematical perspective, this problem no longer has a simple solution.

This phenomenon is more deeply related to the crypto market than it appears on the surface. My core judgment is: in the short term, crypto assets will face pressure, but from a long-term perspective, this could bring new opportunities for asset allocation.

Let's first discuss the short-term pressure. The global liquidity structure is undergoing significant adjustments. When borrowing costs for the yen surge to a 30-year high, those global institutions relying on cheap yen funding will be forced to shrink their positions. A large portion of these funds flow into high-risk areas, including crypto assets, and now they will inevitably retreat. More critically, the current correlation between the crypto market and traditional stock markets has reached 0.6, meaning that once the US stock market experiences volatility, crypto assets tend to decline in tandem. In the upcoming time window, the market may experience a wave of panic selling. Investors need to stay alert and avoid chasing highs during the rebound.

However, from another perspective, this crisis also breeds opportunities. The shift in global central bank policies will not reverse in the short term. In the long run, this means a fundamental change in the liquidity environment of the traditional financial system. Against this backdrop, crypto assets with independent value and financial attributes may see new demand for allocation. Historically, every major liquidity adjustment has created wealth opportunities for investors who can see the trend clearly.

Overall, the current strategy is: acknowledge the existence of short-term risks but do not be dominated by panic; at the same time, prepare for long-term changes.