Bitcoin News Today: Bitcoin's New Reality: Global Central Banks, Not Just Fed, Drive Volatility

Crypto prices slumped sharply on Dec. 1 as the Bank of Japan's potential shift toward tighter monetary policy triggered a global risk-off selloff. Bitcoin (BTC) fell nearly 6% to $85,778, while Ethereum (ETH) dropped 5.85% to $2,814, according to a market analysis from GeekStake. The broader crypto market lost 4.82% of its value, settling at $2.94 trillion after a wave of leveraged positions worth $300 million were liquidated according to the same analysis. The sell-off coincided with a 17-year high in Japanese 2-year bond yields, which spiked to 1.01% amid speculation the BOJ could raise rates at its December meeting.

The Bank of Japan's hawkish signal marked a pivotal moment for global markets. Governor Kazuo Ueda stated the central bank would "consider the pros and cons" of a rate hike, reversing decades of ultra-loose policy. This shift rattled investors, with Japanese bond yields surging and the yen strengthening against the dollar. The ripple effect extended to U.S. Treasuries, where 10-year yields rose to 4.09%, reflecting a broader reallocation of capital away from risk assets. "A stronger yen and rising Japanese yields could pull capital from U.S. equities and bonds, tightening global financial conditions," said Ryan Jacobs of Jacobs Investment Management according to market reports.

Crypto markets, already vulnerable to macroeconomic shifts, bore the brunt of the selloff. Altcoins like XRP and BNB fell more than 10%, exacerbating losses in a sector reliant on short-term liquidity. The downturn also hit crypto-related equities, with digital asset treasuries leading declines as investors unwound leveraged positions. Strategy, the largest corporate holder of bitcoin, slashed its 2025 earnings forecast to a potential $5.5 billion loss amid BTC's 36% drop from its October high.

The selloff underscored crypto's growing sensitivity to a wider array of central bank policies. "Bitcoin no longer moves solely on Fed signals," said Rachael Lucas of BTC Markets. "It reacts to the entire central-bank landscape," she added, noting how the BOJ's pivot amplified the impact of the Fed's expected rate cuts next week according to market analysis. This interplay between global monetary policies has introduced new volatility, with prediction markets pricing a 50% chance of a December BOJ rate hike according to market data.

Regulatory developments further complicated the outlook. South Korea expanded its crypto travel rule to cover all transactions, including those under 1 million won ($680), while Turkmenistan legalized crypto under strict state control according to market reports. These moves highlighted the sector's evolving regulatory landscape, even as market fundamentals remained under pressure.

Looking ahead, investors are bracing for a turbulent week. U.S. economic data releases and President Trump's announced pick for Fed Chair will likely influence risk appetite. Meanwhile, the BOJ's final policy decision on Dec. 19 will remain a key focal point for markets navigating an increasingly interconnected macroeconomic environment.