Just like in the summer of 2024, Japanese bonds are pressuring Bitcoin

0

Last Updated on 23 January 2026 by CryptoTips.eu

Just as the storm surrounding Greenland has subsided, a new economic problem is looming on the horizon. Long-term interest rates in Japan are rising, which is quite remarkable, as the last time this happened, Bitcoin’s price fell by 30% in a single week (in August 2024). Will it be a problem again?

Advertentie.

Yen Carry

After the Japanese stock markets collapsed in the late 1990s, the Bank of Japan began a two-decade experiment: zero interest rates. Whatever happened, interest rates in Japan remained very low or were simply set at zero.

Therefore, and certainly since 2013, the “Yen Carry Trade” became highly popular among Western investors. The logic goes like this: If you know a particular investment will yield 5% per year (the average return on the S&P 500 over the past twenty years, for example), you borrow Japanese yen at an ultra-low interest rate to pocket the difference. So, for example, you pay 2% on your loan to earn a 5% profit. The difference, 3%, is yours.

American investors therefore borrowed Yen to buy more and more Bitcoins.

 

The problem is that due to Japan’s aging population, long-term economic growth now seems uncertain, causing long-term interest rates to rise.

This has been particularly strong again since last week. Consequently, less yen is being borrowed, which also means less investment in risky investments like Bitcoin.

The Japanese ten-year government bond rose from 2.18% on Friday, January 16, to 2.274% on Monday, January 19, and then to 2.341% on Tuesday, January 20. Today, the rate is at its highest level since 2022, meaning the yen carry trade is much smaller than before, and thus there’s less investment in Bitcoin.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
View all posts