Bank of Japan Rate Hike Sparks Bitcoin Gains and Altcoin Optimism

The Bank of Japan (BoJ) has raised its interest rate to 0.5%—the highest level in 17 years—signaling its effort to curb rising inflation, with the Consumer Price Index reaching 3.6%.
This move strengthens the Japanese yen against the U.S. dollar but has created limited turbulence in global markets compared to past rate hikes.
Unlike previous instances, the crypto market has reacted positively to the rate hike. Bitcoin gained nearly 3%, trading at $104,624, while altcoins like Ethereum, Solana, and Cardano posted gains of up to 4%. Analysts attribute this to a weakening U.S. Dollar Index (DXY), which has historically boosted Bitcoin’s price due to its inverse correlation.
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Concerns about a yen carry trade unwind—where investors sell assets purchased with borrowed yen—appear minimal this time. Market experts note that this strategy was largely unwound in 2024, and with reduced global volatility, its current impact is limited.
Adding to the bullish sentiment is Donald Trump’s recent executive order supporting a national digital asset reserve. Market watchers are optimistic about a potential altcoin rally, with gains of 20-25% becoming a possibility as confidence grows. The Altseason Index has climbed above 50, signaling a resurgence of optimism among investors, with Ethereum, Solana, and XRP expected to lead the charge.