Bitcoin faces a “liquidity drain” danger zone as Japan’s 30-year yield breaks a historic record

The historic rise of Japan's 30-year government bond yield to around 3.5% signals a significant shift away from an era of cheap funding, impacting Bitcoin as a global risk asset. This shift is driven by the Bank of Japan (BOJ) tightening policy and a contraction in the monetary base, suggesting Japan is exiting its role as a primary supplier of cheap global liquidity. This change affects Bitcoin through three main channels: the unwinding of yen funding channel carry trades, which forces deleveraging across asset classes; the potential for higher long-end yields to tighten global financial conditions, pressuring assets dependent on easy leverage; and secondarily, by raising fiscal sustainability concerns that might eventually push some investors toward Bitcoin, though short-term risk appetite usually suffers first. Traders should monitor the USD/JPY pair, the 30-year yield, and Japanese cross-border securities flows as indicators of potential stress, as a rapid yen rally combined with rising yields suggests a macro storm that could impact Bitcoin.

(Source：CryptoSlate)