Crypto Crash Warning: Yen’s Surge and Potential BOJ Rate Hike Shake Markets

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The Japanese yen just crossed a key level of 150 against the U.S. dollar, which is often a sign of stress in global markets. Known as a “safe haven,” the yen usually gains strength when investors grow cautious and move their money away from risky assets. This shift is tied to speculation that Japan’s central bank, the Bank of Japan (BOJ), might raise interest rates in December, especially after higher-than-expected inflation in Tokyo. It could be a signal of a severe market crash building up in December. 

This yen surge has created a stark contrast with the U.S., where there’s now a high chance of the Federal Reserve cutting rates. If the BOJ raises rates, borrowing in yen becomes more expensive, making it harder for investors to fund risky assets like cryptocurrencies.  

Why the Yen Matters for Crypto?

When the yen strengthens, it often triggers a “risk-off” mood in markets, pulling money out of riskier assets like Bitcoin (BTC). A similar yen rally earlier this year caused a massive $20,000 drop in Bitcoin prices. This is because yen movements impact carry trades, where investors borrow yen at low interest rates to invest in higher-yield assets like crypto. When borrowing yen becomes expensive, it forces investors to unwind these trades, which can hurt the crypto market.

XRP Steals the Show

Amid this turbulence, XRP has been the star performer. While Bitcoin showed a modest rise to $96,000 and Ethereum (ETH) remained stable, XRP surged over 5% in the past 24 hours, outpacing major cryptocurrencies. XRP is trading at $1.66, with a 24-hour range of $1.43 to $1.57. With a market cap of $89 billion and $6 billion in trading volume, the 6th largest cryptocurrency holds 2.66% market dominance.

XRP’s rally comes as a surprise and reflects growing confidence in the token, particularly due to its clearer regulatory status in some regions. With Gensler stepping in January, XRP is ultra bullish to hit a record high. 

Other mid-sized tokens, like Algorand (ALGO) and Worldcoin (WLD), also saw big jumps, gaining over 20%. However, the overall crypto market mood remains cautious as the yen’s strength signals potential market turbulence ahead.