The Bank of Japan raised interest rates by 25 basis points to 0.75%, and the market is still speculating whether there will be further hikes. For the crypto sector, the impact chain is actually not complicated:

First, look at arbitrage traders. Many previously used cheap yen leverage to buy mainstream coins like Bitcoin and Ethereum to profit from price differences. Now that borrowing costs in yen have increased, these traders will inevitably close positions and repay debts, leading to short-term sell-offs and price pressure.

Second, from a psychological perspective. The interest rate hike itself signals that the central bank is tightening, which will reduce market risk appetite, and both retail and institutional investors will become more cautious. However, the Bank of Japan also emphasized the slow economic recovery and persistent inflation, which can help ease some panic, serving as a mutual check.

Looking at the exchange rate angle. Rate hikes will push the yen higher, causing the dollar to weaken. Since the crypto market is priced in USD, a weaker dollar will limit upward price movement.

But don't be overly pessimistic. The central bank stated that even with rate hikes, overall liquidity remains accommodative. This round of shocks is mainly short-term emotional and capital fluctuations, which won't change the medium-term rhythm of the crypto market.