Bank of Japan Raises Interest Rates, Eyes Bitcoin Market

Hours
What to Know:
  • Main event, leadership changes, market impact, financial shifts, or expert insights.
  • BOJ raised rates to 0.75%, ending ‘free money’ era.
  • Bitcoin rebounded post-hike, reaching $87,000-$88,000.

The Bank of Japan raised its short-term policy rate by 25 basis points to 0.75% on December 18-19, 2025, marking an end to the era of ultra-low rates.

The rate hike signals policy normalization amid yen weakness, impacting global liquidity and risk assets like Bitcoin, which surged above $87,000 despite short-term pressures.

BOJ Raises Rates to Highest Level in 30 Years

The Bank of Japan’s decision to raise its interest rate by 25 basis points is a historic move, marking the highest rate in 30 years. Persistent inflation and yen weakness drive this change as BOJ aims to stabilize the economy. BOJ Governor Kazuo Ueda leads this policy shift, with no direct quotes on crypto impacts. Former BitMEX CEO Arthur Hayes predicts a yen weakening and potential Bitcoin surge, indicating a mixed market reception.
“Don’t fight the BOJ: negative real rates is the explicit policy. $JPY to 200, and $BTC to a milly.” — Arthur Hayes, Former CEO, BitMEX.

Bitcoin Rebounds to $88,000 After BOJ Rate Hike

The rate hike prompted immediate market reactions, with Bitcoin rebounding to about $88,000. However, other cryptocurrencies like Ethereum and XRP faced declines, reflecting short-term liquidity shifts in the financial landscape. Financially, this move pressures global liquidity. However, U.S. equity futures and ETF flows help stabilize Bitcoin, showing the intricate interplay between markets amid policy changes.

2024 and 2025 BOJ Hikes Hint at Bitcoin Volatility

Similar past BOJ rate hikes, such as those in 2024 and 2025, led to significant declines in Bitcoin, evidencing the effect of carry trade unwinds. Such historical data provide insights into potential market volatility. Experts suggest that while Bitcoin shows resilience, future outcomes depend heavily on global monetary policies. The interplay of BOJ’s rate hike with other central banks could define long-term asset behaviors.

Disclaimer: The information on this website is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are volatile, and investing involves risk. Always do your own research and consult a financial advisor.
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Thane Morrison is a diligent crypto news author and keen blockchain and digital finance enthusiast. He writes insightfully correct engaging content on Bitcoin, altcoins, DeFi, and NFTs to help readers understand how this relentless, changing world works. Simplification and empowerment are what he really stands for and enables readers to keep their heads in the game when making vital decisions in such a demanding space.

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