Bitcoin News Today: Yen Carry Trade Unwinding: The $20T Wild Card Shaking Crypto

Bitcoin's recent price slump has drawn sharp focus as analysts link the sell-off to a confluence of macroeconomic pressures, particularly the Bank of Japan's (BOJ) tightening signals and the unwinding of yen carry trades. The cryptocurrency's drop below $87,000 in early December, coupled with over $643 million in forced liquidations, underscores a market grappling with shifting liquidity dynamics and policy uncertainty. Arthur Hayes, founder of BitMEX, has weighed in, suggesting that the $80,000 level may mark a critical bottom for Bitcoin, though he cautions that broader market conditions-including U.S. Treasury debt issuance and AI sector concerns-could prolong volatility according to Hayes.

The BOJ's hawkish pivot has emerged as a key catalyst. Governor Kazuo Ueda's remarks on December 1, hinting at a potential rate hike, triggered a surge in Japanese bond yields, with the 10-year hitting 1.86%, its highest since 2008. This has rattled the yen carry trade, a long-standing strategy where investors borrow yen at near-zero rates to fund riskier assets. As yields rise and the yen strengthens, this trade is unwinding, draining liquidity from global markets and disproportionately impacting leveraged crypto positions. Prediction markets now price a 57% chance of a BOJ rate increase, up from 50% before Ueda's speech.

The fallout is evident in crypto markets.

Bitcoin and Ethereum faced heavy liquidations, with BTC dropping 5.2% to $86,062 and ETH falling 5.4% to $2,826 on December 1. Over $600 million in long positions were liquidated, as traders with bullish bets were forced to close positions amid the sell-off. This follows a broader pattern: November saw crypto market liquidations exceed $1.33 billion, signaling ongoing deleveraging. Hayes attributes part of the decline to institutional unwinding of Bitcoin ETF positions and Treasury bill issuance siphoning liquidity from the market according to Hayes.

Regulatory shifts in Asia are compounding the pressure. South Korea's Financial Services Commission (FSC) expanded its "travel rule" to cover all crypto transactions, including those under 1 million won ($680). This mandates identity verification for every trade, raising compliance costs for exchanges like Upbit and Bithumb and potentially slowing retail activity. While the policy aligns with global anti-money laundering standards, it adds friction to a market already reeling from macroeconomic headwinds.

Amid the turmoil, some crypto projects are carving out distinct narratives. Bitcoin Munari, for instance, continues its presale at a fixed $0.22 per token, maintaining a 21 million supply cap and a structured rollout across ten rounds. The project's roadmap includes a 2026 testnet and a 2027 mainnet transition, offering a contrast to the volatile spot markets. Meanwhile, Blazpay's token presale enters a critical phase, with a 3.4x–5x potential gain anticipated post-launch, though its success hinges on market stability according to market analysis.

Looking ahead, the interplay between the BOJ's policy path and U.S. Federal Reserve actions will shape crypto's trajectory. While the Fed's 80% probability of a December rate cut (per CME FedWatch) offers some hope, Hayes argues that Treasury-driven liquidity constraints and AI sector concerns could temper recovery. The yen carry trade's unwinding remains a wild card, with $20 trillion in exposure at risk of triggering further global market turbulence.