With just two days to go, the Bank of Japan (BOJ) is set to deliver one of its biggest interest rate decisions, which could strongly impact the crypto market.
This time, the move is even more aggressive. Japan is preparing a 75 basis point interest rate hike, its highest level in over 30 years.
History shows that whenever the BOJ raises rates, the Bitcoin price has fallen by 25–30%.
For decades, Japan kept interest rates very low to support growth and fight deflation. However, the situation has changed. Inflation is now above the Bank of Japan’s (BOJ) 2% target, while economic growth remains weak.
On December 19, the BOJ will hold a key policy meeting and is widely expected to raise interest rates. Markets, including prediction platforms like Polymarket, are pricing in a 25 basis point hike with nearly 98% probability.
That said, some experts believe the move could be much stronger. Recent discussions suggest Japanese officials are open to a more aggressive step, with rates possibly rising by up to 75 basis points. If this happens, the policy rate would reach 0.75%, the highest level in over 30 years.
Recent business surveys showed improved confidence among large Japanese firms, supporting expectations of the rate hike.
The Bank of Japan is tightening policy as inflation stays close to 3%, even after keeping rates at 0.5% in October 2025. At the same time, Japanese bond yields have jumped to multi-decade highs, with the 10-year yield near levels last seen in the late 2000s.
Because Japan is a major global investor and holds over $1.1 trillion in the U.S. Treasuries, higher domestic rates could encourage Japanese funds to move money back home.
Alongside rate hikes, the BOJ plans to sell nearly $550 billion in ETF holdings and scale back stimulus, marking a clear exit from decades of ultra-easy monetary policy.
If the Bank of Japan hikes interest rates by 75 basis points, Bitcoin is likely to face strong selling pressure. History shows a clear connection between BOJ tightening and Bitcoin price drops.
Many crypto analysts now warn that Bitcoin’s recent selling could worsen after the December rate hike.
Bitcoin, which is currently struggling around $90,000, may face pressure that pushes it below $70,000 if global liquidity contracts further.
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