Advertise
- Rizwan Ansari
Rizwan Ansari
- Reviewed by:
Sohrab KhawasSohrab is a passionate cryptocurrency news writer with over five years of experience covering the industry. He keeps a keen interest in blockchain technology and its potential to revolutionize finance. Whether he's trading or writing, Sohrab always keeps his finger on the pulse of the crypto world, using his expertise to deliver informative and engaging articles that educate and inspire. When he's not analyzing the markets, Sohrab indulges in his hobbies of graphic design, minimal design or listening to his favorite hip-hop tunes.
- Dec 08, 2025 08:26 UTC
-
Japan Bond Yields Hit 2.94% Highest Since 1998, Bitcoin Crash Coming
-
BTC $ 87,564.92 (0.08%) 
Rising Japanese yields may trigger $500 billion outflows, pressuring U.S. bonds and crypto.
Japan’s 20-year bond yield hits 2.94%, raising major global risk concerns everywhere.
Experts predict Bitcoin faces 5–8% downside risk as Japan’s rate surge impacts global liquidity heavily.
Japan, the world’s second-largest economy, saw its 20-year government bond yield rise to 2.947%, the highest since 1998. With debt piling up and borrowing costs climbing rapidly, Japan may be forced to bring hundreds of billions of dollars back home. If that happens, U.S. bonds, Tether, and even Bitcoin could be affected.
Experts predict the Bitcoin price could drop 5–8% if Japanese bond yields stay above 2.90%.
Japan’s Debt Trap Is Reaching Its Breaking Point
Japan carries one of the heaviest debt loads on Earth, 263% of its GDP, nearly $10.2 trillion in total.
For decades, they managed this only because interest rates were near zero. But now, with inflation staying above 2% and the Bank of Japan lifting short-term rates to 0.5%, the cost of borrowing is exploding.
At these new yield levels, Japan’s interest bill could jump from $162 billion to $280 billion over the next decade. That means nearly 38% of government income would go on paying interest.
No big country has ever handled debt this big without facing serious problems.
Why This Forces Japan Toward Selling U.S. Treasuries
Japan is the largest foreign holder of U.S. debt, holding over $1.13 trillion in Treasuries. But rising Japanese bond yields now make U.S. bonds unprofitable after currency risk. This means Japanese investors will start coming back home.
Economic models predict that up to $500 billion could leave global markets in the next 18 months, pushing U.S. borrowing costs higher even without a Fed rate hike.
Therefore, Japan’s growing debt problem isn’t just Japan’s problem anymore. It could impact global markets.
How Bitcoin and Tether Are at Risk?
For years, people borrowed cheap money in Japan, about $1.2 trillion, and used it to buy things like stocks, crypto, and other investments. Now, if Japan sells U.S. bonds, others may follow.
If U.S. bond prices drop, Tether, which holds a lot of Treasuries, will come under pressure. And if Tether falls, Bitcoin usually falls too.
We’ve seen this before, when in July 2024, a BOJ rate hike caused an 18% Bitcoin drop to $53,000, causing nearly $3 billion in value to be wiped out from the crypto market
Even recently, when BOJ just hinted at a rate hike, Bitcoin fell from $92,000 to $83,832.
Right now, if Japanese yields remain above 2.90%, Bitcoin could move down toward the $87,000 support. However, Trump’s pro-crypto stance and ETF inflows provide buffers, potentially limiting losses to 5-8%.
As of now, Bitcoin is trading near $91,728, about 8% below its earlier highs, with the total crypto market cap at $3.1 trillion.
Never Miss a Beat in the Crypto World!
Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more.
FAQs
Higher Japanese yields may trigger money flowing out of global markets, pressuring crypto. This could push Bitcoin down by about 5–8%.
Yes. If yields stay high, Bitcoin could retest lower support levels as investors unwind risk positions linked to Japan’s tightening cycle.
Yes. Strong ETF demand and pro-crypto U.S. policies offer support, helping limit downside even if Japan’s debt pressures global markets.
Trust with CoinPedia:
CoinPedia has been delivering accurate and timely cryptocurrency and blockchain updates since 2017. All content is created by our expert panel of analysts and journalists, following strict Editorial Guidelines based on E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness). Every article is fact-checked against reputable sources to ensure accuracy, transparency, and reliability. Our review policy guarantees unbiased evaluations when recommending exchanges, platforms, or tools. We strive to provide timely updates about everything crypto & blockchain, right from startups to industry majors.
Investment Disclaimer:
All opinions and insights shared represent the author's own views on current market conditions. Please do your own research before making investment decisions. Neither the writer nor the publication assumes responsibility for your financial choices.
Sponsored and Advertisements:
Sponsored content and affiliate links may appear on our site. Advertisements are marked clearly, and our editorial content remains entirely independent from our ad partners.
Yes 
No 
