Bitcoin News Update: Japan's Bond Turmoil Triggers Worldwide Crypto Sell-Off Amid Yen Carry Trade Reversal
- Japan's $135.4B stimulus package triggered a 3.41% surge in 30-year bond yields, destabilizing the $20T yen carry trade and sparking global crypto/stock selloffs. - Rising yields threaten Japan's 230% GDP debt load with higher servicing costs, creating a "debt death spiral" risk as BOJ hesitates to tighten policy. - Forced deleveraging by financial institutions intensified Bitcoin's 26% drop, with Ethereum/XRP/Solana also falling 3-5.6% amid margin calls and capital repatriation. - Upcoming 40-year bond
The Underlying Cause
On November 21, 2025, Bitcoin’s value plunged beneath $86,000, representing one of the sharpest drops in recent months. The broader cryptocurrency market followed suit, echoing a worldwide selloff sparked by unexpected upheaval in Japan’s bond sector. While factors such as ETF withdrawals and geopolitical strife played a role, experts highlight a more fundamental problem: a rapid rise in Japanese government bond yields destabilized the yen carry trade—a long-standing source of global liquidity—prompting widespread forced selling of risk assets, including digital currencies
Japan’s 30-year bond yield jumped to 3.41%, its highest since 1999, after the government revealed a $135.4 billion stimulus plan to help households cope with inflation
Japan’s economic and monetary decisions now represent a major threat to global financial stability. If the upcoming 40-year bond auction sees weak demand, as indicated by a low bid-to-cover ratio,
The downturn is not limited to cryptocurrencies. Asian equities, particularly Japan’s Nikkei, experienced steep losses as investors anticipated more instability, while gold and other stocks also dropped
For those investing in cryptocurrencies, the takeaway is unmistakable: broad economic forces, not just crypto-specific factors, shape market movements. “This is not a standard correction—it’s a worldwide liquidity crunch,” said Shanaka Anslem Perera, an analyst quoted in several reports. As volatility persists in Japan’s bond market, ongoing instability in crypto and other risky assets is likely until liquidity strains ease
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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