The cryptocurrency market started December in the red, pressured by many factors, including Japan's interest rate policy decision, which made many investors cautious. On December 1, the market witnessed a sharp decline, with Bitcoin falling more than 5% to below $86,000. This was a notable drop, reflecting investors' concerns about financial policy moves around the world.
On economic news, Bank of Japan (BOJ) Governor Kazuo Ueda emphasized that if economic activity and inflation forecasts are realized as expected, the BOJ will continue to raise policy rates based on improvements in the economy and prices. This message quickly had a negative impact on Asian stock markets in the morning trading session, indirectly causing the Crypto market to fluctuate. According to The Japan Times, the yield on two-year Japanese government bonds rose to 1%, the highest since 2008, reflecting market expectations that the BOJ will soon raise interest rates. The yield on five- and ten-year bonds also increased to 1.35% and 1.845%, respectively, while the yen strengthened 0.4% against the USD, reaching 155.49 yen. The market is currently pricing in a 76% chance of a BOJ rate hike at its December 19 meeting, with the figure expected to exceed 90% for the January meeting next year.
In the US political context, President Donald Trump announced that he had finalized his nomination for the position of Chairman of the Federal Reserve (Fed). On the same day, social media was abuzz with rumors that the current Fed Chairman, Jerome Powell, would officially announce his resignation in an emergency meeting at 7 p.m. ET on Monday. This information created a wave of volatility in the global financial market, making cryptocurrency investors more cautious in short-term transactions.
In Asia, the People's Bank of China (PBOC) held a meeting on November 28 to discuss a coordination mechanism to combat speculation in virtual currency trading. The meeting emphasized that virtual currencies do not have the legal status of fiat currencies, are not considered legal means of payment, and cannot be used as money in the market. All business activities related to cryptocurrencies are XEM illegal financial activities. In addition, stablecoins, although a popular form of cryptocurrency, do not fully meet customer identification and anti-money laundering requirements, and pose a risk of being exploited for illegal activities such as money laundering, Capital fraud, and illegal cross-border money transfers.
