BOJ Rate Hike May Spark Yen Surge, Cryptocurrency Sell-Off

The Bank of Japan's expected rate hike in September may have far-reaching consequences for cryptocurrencies. A Reuters poll shows that 57% of economists expect rates to rise to 1.25%, up from just 5% in July, due to high inflation and a weak yen.

The yen carry trade is at risk if the BOJ raises rates, which could lead to forced selling and margin calls on assets like Bitcoin (BTC). This happened in August 2024 when a surprise rate hike sent BTC plummeting from $64,000 to $49,000 in just 48 hours.

Ethereum (ETH) may also be affected by the yen's strength, as it often moves more than BTC during market stress. XRP is less directly impacted but typically follows broader crypto market sentiment.