December 20th is a date many people may remember. The Bank of Japan is preparing for its most aggressive rate hike since 1995. Do you think this is just a change in an interest rate figure? Wrong—it’s a major reshuffling of capital in the crypto market.

Once the yen appreciates, global capital flows will have to be completely rebalanced. Normally, a rate hike = liquidity drain, and liquidity in the crypto space would be sucked dry. But this time is different—the Bank of Japan is signaling a “moderate adjustment,” not a hardline tightening. This gives the market some breathing room.

Keep in mind, Japanese retail investors account for more than 30% of the crypto market. Should domestic funds flow back? How will international hot money hedge? The game has already begun. The recent incident where Bitcoin plunged 15% due to yen carry trades is still fresh in our minds, and now the situation is even more complicated.

What should you do? Three actions are essential:

First, immediately lower your leverage. A single-day liquidation of $1 billion across the network is no joke. If you’re still floating on more than 3x leverage, cut half right away.

Second, keep a close eye on Japan-related concepts. Tokens from exchanges like Bitbank and Coincheck may become safe havens.

Third, pay attention to the stablecoin sector. Société Générale and the Hong Kong Monetary Authority have already entered the space, and USDT’s competitors are on the rise.

The crypto market always turns on three wheels: policy, sentiment, and capital. Japan’s rate hike isn’t the end of the world—it’s a mirror revealing who’s swimming naked and who has real skills.

Instead of staring blankly at Bitcoin’s $100,000 target, adjust your strategy when others panic, and cash out when others are going crazy. The market always rewards those who are prepared.