The weakening of the Japanese yen has sparked concerns about the potential unwinding of the $14 trillion yen carry trade, which could lead to global financial instability and impact cryptocurrencies like Bitcoin. Analysts caution that a sudden yen appreciation or a policy shift by the Bank of Japan (BoJ) might trigger a massive sell-off, affecting global markets. In August 2024, Bitcoin's price dropped below $50,000 amid similar financial turmoil. If the BoJ raises interest rates, investors may be compelled to sell global assets to repay yen-denominated debt, exerting short-term selling pressure on Bitcoin and other assets.
Bitcoin at Risk from Potential Yen Carry Trade Unwinding
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