BOJ Rate Hike Could Unleash Global Liquidity Squeeze on Bitcoin

A prominent macro analyst has warned that an expected Bank of Japan rate hike could trigger another Bitcoin sell-off.

The BOJ is set to raise its short-term policy rate from 0.75% to 1.0% at its June 15-16 meeting, which would be the highest level since 1995.

The concern centers on the yen carry trade, where investors borrowed cheaply in yen and moved that capital into higher-yielding assets worldwide, including US tech stocks, emerging markets, and crypto.

According to the analyst, a hike threatens to unwind this flow, creating a global liquidity squeeze. He pointed out that Bitcoin tends to react badly when funding conditions tighten.