Bitcoin News Update: Bitcoin Faces a New Era as Worldwide Central Banks, Beyond the Fed, Influence Market Fluctuations

Global Crypto Market Hit by BOJ Policy Shift

On December 1, cryptocurrency values experienced a significant decline after signals emerged that the Bank of Japan (BOJ) might move toward a tighter monetary stance, sparking a widespread retreat from riskier assets worldwide.

Bitcoin (BTC) tumbled by almost 6% to $85,778, while Ethereum (ETH) saw a 5.85% decrease, landing at $2,814, as reported by GeekStake. The overall crypto sector lost 4.82% of its market capitalization, dropping to $2.94 trillion, following the liquidation of $300 million in leveraged positions. This downturn coincided with Japanese 2-year bond yields reaching 1.01%—their highest point in 17 years—amid speculation that the BOJ could raise interest rates at its upcoming December meeting.

BOJ’s Hawkish Tone Shakes Global Markets

The BOJ’s more aggressive stance marked a turning point for international financial markets. Governor Kazuo Ueda indicated the central bank would weigh the benefits and drawbacks of a rate increase, signaling a departure from its long-standing ultra-loose monetary approach. This announcement unsettled investors, causing Japanese bond yields to surge and the yen to strengthen against the U.S. dollar. The impact rippled through to U.S. Treasuries, with 10-year yields climbing to 4.09%, reflecting a broader shift of capital away from risk assets. Ryan Jacobs of Jacobs Investment Management noted that a stronger yen and rising Japanese yields could prompt investors to pull funds from U.S. stocks and bonds, tightening global financial conditions.

Crypto Sector Bears the Brunt

Already sensitive to global economic changes, the crypto market was hit hard by the selloff. Alternative coins such as XRP and BNB dropped by over 10%, deepening losses in a sector heavily dependent on short-term liquidity. The decline also affected crypto-related stocks, with digital asset treasuries leading the downturn as investors exited leveraged positions. Strategy, the largest corporate holder of bitcoin, revised its 2025 earnings outlook, projecting a potential $5.5 billion loss after BTC fell 36% from its October peak.

Central Bank Moves Drive New Volatility

This episode highlighted how cryptocurrencies are increasingly influenced by central bank decisions worldwide. Rachael Lucas of BTC Markets observed that Bitcoin now responds to a broader range of central bank actions, not just those from the Federal Reserve. She emphasized that the BOJ’s policy shift intensified the effects of the Fed’s anticipated rate cuts. The interplay of global monetary policies has introduced fresh volatility, with prediction markets estimating a 50% probability of a BOJ rate hike in December.

Regulatory Changes Add Complexity

Regulatory shifts have further complicated the outlook for digital assets. South Korea extended its crypto travel rule to include all transactions, even those below 1 million won ($680), while Turkmenistan legalized cryptocurrency under strict government oversight. These developments underscore the rapidly changing regulatory environment for crypto, even as market fundamentals remain under strain.

What’s Next for Investors?

Looking forward, market participants are preparing for a volatile week ahead. Upcoming U.S. economic reports and the announcement of President Trump’s nominee for Federal Reserve Chair are expected to influence investor sentiment. Meanwhile, the BOJ’s final policy decision on December 19 will be a crucial event for markets navigating an increasingly interconnected global economy.