Crypto Market Braces for Deeper Losses as BOJ Board Pushes for More Rate Hikes

The current losses plaguing the crypto market could get even worse amid potential macroeconomic changes. This comes as the Bank of Japan board members continue to push for further hikes in its interest rates.

BOJ Board Insists on Interest Hikes Amid Crypto Market Jitters

Board Members of the bank have continued to push for further interest rate hikes in order to curb the inflation risk the country currently faces.

According to Bloomberg, a BOJ board member, Kazuyuki Masu, emphasized the need to increase the benchmark interest rate even further in order to finish the process of normalizing policy settings, and this is likely to fuel further emerging rumors of an early hike in the interest rate.

Another interest hike could be potentially disastrous for the crypto market, looking at historical trends. Masu’s remarks are another indication of hawkish comments from the BOJ. This follows comments made at the January BOJ policy meeting.

The comments have lifted market expectations for a possible rate hike as early as April. After the BOJ rate hike in December, economists had anticipated that the next rate change would be in June or July.

As of press time, the crypto market has seen one of its worst declines in recent years. However, Masu believes its “vital” this is done to maintain the inflation rate below 2%.

Markets are giving about a 74% chance that the BOJ will lift the policy rate by April, based on prices in the overnight index swaps market. The next policy decision from the bank is due on March 19.

Bitcoin Sell-Off Hits Companies That Loaded Up on Crypto

The volatility in the market is negatively affecting the shares of companies that invest in cryptocurrencies such as Bitcoin on their balance sheets. A number of publicly traded companies invested in cryptocurrencies with the hope of capitalizing on the boom of last year.

The company, Strategy, one of the bitcoin traders, saw its MSTR stock decline from an earlier $457 in July to a low of around $100 due to the crypto market crash. This is the lowest in data that goes back to August 2024. Strategy was trading down more than 11 percent. BitMine’s stock has been falling rapidly as the firm’s treasury now sits on $8 billion in unrealized losses.

The price of Bitcoin has been trading almost 20% lower since the beginning of this year. Its decline got worse by the news that Trump nominated economist Kevin Warsh as the new Fed chair, which could lead to a smaller Fed balance sheet.