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Crypto Markets Stumble as BOJ Rate Hike Fears Trigger Liquidity Squeeze

Crypto Markets Stumble as BOJ Rate Hike Fears Trigger Liquidity Squeeze

Author:

Global Cryptocurrency

Published:

2025-12-23 12:11:01

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BTCCSquare news:

Digital assets face renewed pressure as Japan's potential shift from ultra-loose monetary policy rattles global markets. Bitcoin and Ethereum lead declines, with total crypto market capitalization shedding 1.3% to $3.06 trillion amid spiking volatility.

The Bank of Japan's former board member Makoto Sakurai signaled possible rate hikes to 1% by 2026—a tectonic shift for the last holdout of negative interest rates. This prospect strengthens the yen while draining liquidity from risk assets, mirroring 2022's Fed-induced crypto winter.

Gold's record surge compounds the pain. Futures breached $4,500/oz as investors flock to traditional havens, diverting capital from digital assets. The divergence highlights crypto's lingering sensitivity to macro conditions despite growing institutional adoption.

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