The Bank of Japan's (BOJ) recent interest rate hike to 0.75% on December 19, 2025, is causing ripples in the cryptocurrency market, with Bitcoin (BTC) facing potential declines of 20-31%. The rate increase, part of BOJ's ongoing efforts to address inflation, is impacting global financial markets and increasing volatility in crypto assets. The unwinding of yen carry trades is contributing to bearish pressure on Bitcoin and altcoins, as investors brace for further rate hikes. Market participants are closely watching BOJ's next move, with a 74% chance of another rate increase in April 2026, according to overnight index swaps. This anticipation is tightening liquidity and affecting BTC-heavy portfolios worldwide. As the yen strengthens, risk appetite may diminish, leading to further asset revaluations in the crypto sector. Historical patterns from previous BOJ rate hikes suggest potential financial disruptions, with market watchers predicting continued struggles for cryptocurrencies amid Japan's monetary policy adjustments.