Expectations of Bank of Japan interest rate hikes intensify; Bitcoin and the crypto market may face deeper correction risks

On February 6, news reports indicated that amid the tightening global macro environment, the Bank of Japan (BOJ) has once again signaled a hawkish stance, leading to a rapid increase in market expectations for an early rate hike. This move is believed to potentially further suppress high-risk asset performance and adds new uncertainties to the already pressured cryptocurrency market.

According to Bloomberg, BOJ Board Member Eiji Hoshi stated that in order to complete the process of normalizing monetary policy, it is necessary to continue raising the benchmark interest rate to address inflationary pressures. He emphasized that keeping inflation near the 2% target remains a core task. This statement reinforced market expectations of a tightening stance by the BOJ and sparked speculation about the possibility of another rate hike as early as April.

The overnight index swap (OIS) market pricing shows that investors now believe there is approximately a 74% chance of the BOJ raising rates in April. The next rate decision will be announced on March 19. The rate hike in December last year caused a chain reaction in global risk assets, and now, signaling further tightening again, is seen as one of the macro factors unfavorable to the crypto market.

Meanwhile, Bitcoin experienced a significant correction, and the stock prices of listed companies holding large amounts of digital assets also suffered heavy losses. MicroStrategy’s (MSTR) stock price has fallen sharply from its high in July last year to around $100, hitting a new low for the phase. BitMine is also facing substantial unrealized losses, with ongoing pressure on its book value.

Since the beginning of this year, Bitcoin’s price has declined by nearly 20%. Additionally, the news of Trump nominating Kevin Warsh as the new Federal Reserve Chair is interpreted as a potential move to reduce the US balance sheet, further tightening liquidity conditions.

With multiple macro factors converging, the crypto market is facing a more complex external environment. For investors concerned with Bitcoin price trends, macro interest rate changes, and corporate holding risks, the BOJ’s policy path may become an important variable influencing market sentiment.