Bitcoin Gains Near 3% Despite Bank of Japan Rate Hike

Bitcoin (BTC) aimed for $88,000 on Friday after Japan’s central bank raised interest rates to 30-year highs.

Key points:

• Bitcoin joins US stocks futures heading higher in a curiously bullish reaction to Japan’s interest-rate hike.

• Commentators argue that no further hikes will happen due to economic forces.

• Bitcoin continues to hammer out a bottom on longer timeframes.

Arthur Hayes eyes BTC price, yen surge

Data from Cointelegraph Markets and TradingView showed 2.5% BTC price gains versus the daily open.

In line with expectations, the Bank of Japan (BoJ) hiked rates to around 0.75% on the day, marking their highest levels in three decades and ending the country’s latest period of “cheap” money.

Against a backdrop of global central-bank policy easing, Japan’s move stood out. While the hike was notionally a headwind for crypto and risk assets, reactions were optimistic.

“Don’t fight the BOJ: -ve real rates is the explicit policy,” Arthur Hayes, former CEO of crypto exchange BitMEX, told X followers. 

Hayes was one of several commentators who saw the hike as ultimately bullish for asset holders.

Continuing, the research project Temple 8 Research flagged an emerging standoff between market expectations and economic reality in Japan.

“The market sees a hawkish pivot. We see a political ceiling,” it summarized in a blog post last week.

Temple 8 predicted that rates would not rise again before 2027 to protect the yen and avoid increased interest payments on Japan’s latest $140 billion stimulus package.

“You cannot floor the gas (Fiscal Stimulus) while slamming the brakes (Rate Hikes),” the post added. 

Bitcoin lacks “true capitulation event”

Bitcoin thus joined US stocks futures heading higher ahead of Friday’s Wall Street open. 

Related: Bitcoin institutional buys flip new supply for the first time in 6 weeks

At the time of writing, Nasdaq 100 futures were up 1.5%, while the S&P 500 sought a rebound after flat performance.

“With participation remaining strong some measures of investor sentiment shifting back to showing fear, that’s a positive backdrop to see a rally in the final weeks of the year,” trading resource Mosaic Asset Company forecast in a blog post Thursday.

At the same time, BTC/USD hit a low of $84,390 amid volatility following the surprise US inflation data.

Traders remained highly cautious, with calls for further support retests commonplace on social media.

“Bitcoin is currently hammering out a bottom, but the process is far from over,” onchain analytics platform Checkonchain warned on the day.

Checkonchain singled out $81,000, the cost basis for the US spot Bitcoin exchange-traded funds (ETFs), as a key line in the sand.

It added that the market was yet to witness a “true capitulation event.”

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