On Friday, the Bank of Japan (BOJ) hiked interest rates by 25 basis points (bps) to 0.75%, the highest level in almost three decades. Despite this shift in monetary policy, which analysts had considered detrimental to cryptocurrencies, Bitcoin has held steady, currently trading at $88,282 after rising 1.3% in the last 24 hours, according to data from CoinGecko.
Why Has Bitcoin Remained Steady After the Rate Rise in Japan?
BTC’s latest response to the BOJ’s rate hike defies history, as previous tightening cycles have typically followed massive sell-offs due to traders’ fears that borrowing would become expensive, making it difficult for institutions to access finance and pour liquidity into the crypto markets.
However, this time it appears that traders had already priced in the BOJ’s decision, which is why Bitcoin has not witnessed panic selling. On Thursday, data from predictions site Polymarket showed users had placed a 99% chance that Japan would hike interest rates today.
What Japan’s Latest Decision Means for Crypto
BOJ’s move to raise rates represents a break from many years of low interest rates that allowed both institutions and retail investors to access yen loans cheaply. The borrowed capital is usually converted into US dollars or Euros and then channeled to higher-yielding assets, such as cryptocurrencies and equities.
But this may change as higher rates mean yields on yen investments will now grow, making them more attractive than digital assets and stocks. Furthermore, with borrowing costs for yen loans expected to increase, liquidity poured into the crypto markets may decline over time.
It is worth highlighting that the Bank of Japan has hinted at increasing interest rates further in 2026 if inflation continues to rise. So, even if the latest rate hike hasn’t disrupted the cryptocurrency market, the BOJ’s outlook could maintain pressure on Bitcoin and other digital assets.
How Have Altcoins Responded to BOJ’s Decision?
Similar to Bitcoin, the top ten altcoins have posted minimal gains in the past 24 hours. For instance, Ethereum is up 3.7% to $2,963, while BNB has rallied 1.1% to $848. XRP and Solana, on the other hand, have both recorded a 0.9% growth, rising to $1.87 and $125.24, respectively.
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