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%.
Japan to Hike Interest Rate to 75 Bps
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.
Why the BOJ Is Tightening Policy
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.
What Will Happen to Bitcoin, IF BOJ raises the Rate By 75 BPS
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.
- March 2024 → Bitcoin fell about 20% within six weeks
- July 2024 → Bitcoin dropped 26% in one week
- January 2025 → Bitcoin slid more than 30% over about a month
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.
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.
