The Bank of Japan's first serious rate hike in over a decade has completely disrupted the global financial circle. This is not some distant news; it’s a tangible impact that can directly hit your crypto assets.

First, let's talk about the background. Japan has long implemented a negative interest rate policy, where depositors have to pay fees to keep money in banks. The goal is to forcibly promote consumption and investment. But this year, inflation has become unmanageable, coupled with the yen's sharp depreciation, forcing the central bank to start a cycle of rate hikes. It may sound like a Japan-specific issue, but it’s not.

The key lies in the concept of "interest rate differentials." Japan’s rate hike means a reshuffling of global capital return assessments. Hot money that previously flooded into US stocks and emerging markets due to Japan’s low interest rates might now flow back to Japan. This shift causes other countries’ interest rates to rise passively, with US Treasury yields being the first to be impacted. The recent surge in US Treasury yields is largely driven by this reallocation of funds.

For the crypto market, a high-interest-rate environment usually means risk assets are under pressure. The Federal Reserve, in order to stabilize dollar capital flows, may passively adjust its policies. Regardless of the direction, the short-term operational space for crypto contract players is being squeezed. The current strategy should be to observe rather than blindly bet.