The Bank of Japan is about to get serious—it may implement the highest interest rate since 1995 this December.

Does this sound like a matter for traditional finance? Don’t be naive. Global capital moves like water: when things tighten somewhere, there’s a ripple effect elsewhere. In recent years, Japan’s ultra-low-cost capital has flowed outward, and the crypto market has enjoyed a share of it. Now, with the “faucet” about to be turned off, mainstream coins like BTC and ETH will inevitably experience some turbulence in the short term.

Pay special attention during Asian trading hours. Japanese investors are known for their sensitivity, and combined with a liquidity squeeze, volatility could be greater than usual. That said, this isn’t exactly a bolt from the blue—the market has been anticipating this, and when it finally happens, it could be a classic case of “the shoe dropping.” The real key is whether the Bank of Japan will soften its tone afterward and offer a buffer.

What should retail investors do?

First, don’t overreact to every rumor. When news breaks, the market loves to amplify panic or euphoria, and impulsive trading often leads to losses.
Second, keep your eyes on the Fed—that’s what really matters. The global interest rate landscape is still dictated by the US, and Japan is just a supporting act. Spot traders can use the volatility to enter in batches, while leveraged traders should control their positions—high-leverage contracts are like dancing on a tightrope at times like this.

The environment is changing, but the underlying logic of the bull market remains. Volatility isn’t scary; the key is not to let your emotions take control. Hold on to what you should, wait patiently when needed, and remember: opportunities always favor those who are prepared.