BOJ’s $534B ETF Sell-Off: Bitcoin’s Nightmare Begins? 🚨

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By the cusp of January, the Bank of Japan (BOJ) is poised to initiate a grand disbursement of its colossal ETF portfolio, a mammoth treasure trove valued at ¥83 trillion ($534 billion). The plan? To extricate itself with the subtlety of a moth fluttering through a hurricane. Yet, even a slow-motion exit by the world’s most formidable central bank carries the weight of a gavel in a courtroom of whispers. 📉

Shall we witness the tremors of a financial earthquake, or merely the faintest ripple in the vast ocean of global liquidity? 🌊

Bank of Japan Prepares to Start Selling ETFs

According to the scribes of Bloomberg, BOJ officials have plotted a gradual exodus from ETFs, a maneuver conceived during the September policy board’s deliberations. The central bank has set a pace of ¥330 billion per year based on book value, a timeline stretching longer than the lifespan of a mayfly. 🧠

The central bank’s aim is to render the market’s reaction imperceptible, akin to the silent dissolution of Japan’s bank stocks in the 2000s, a period of serene financial navigation. 🧘♂️

Yet, the magnitude of this endeavor is a spectacle that defies the ordinary, as Japan’s stock market has soared, bestowing the BOJ with monumental unrealized profits. 📈

Rate Hike Expectations Add More Pressure

The ETF exit coincides with the anticipation of a 25-basis-point rate hike at the BOJ’s December 18-19 gathering. Polymarket, that oracle of market whims, forecasts a 98% likelihood of such an increase, which would elevate Japan’s policy rate to 75 basis points, the highest in nearly two decades. 🧙♂️

That shift matters because Japan has long been the world’s cheapest source of leverage. 🧱

“For decades, the Yen has been the #1 currency people would borrow & convert into other currencies & assets… That carry trade is diminishing now, as Japanese bond yields are rising rapidly,” wrote the enigmatic Mister Crypto. 🕵️♂️

The Bank of Japan is about to do a rate hike on Friday the 19th, creating massive fear surrounding the Yen carry trade.

Bitcoin dumped hard the last time they hiked rates:

But why is this exactly? Let’s break it down

What is the Yen Carry Trade?

For decades, the Yen has…

– Mister Crypto (@misterrcrypto) December 14, 2025

Why Bitcoin Is Feeling the Impact

As yen-funded leverage faces the specter of strain, risk assets teeter on the brink. Bitcoin, that digital phoenix, hovers just below the $90,000 threshold, currently languishing at $89,701. 🦅

That said, the market response has been relatively controlled. Many analysts note that expectations around a Bank of Japan rate hike have been circulating for weeks, giving traders time to adjust positioning. In that sense, part of the impact may already be reflected in current prices. 🧠

While the markets remain vigilant, there is no sign of chaotic selling, suggesting investors view this as a macro adjustment rather than a sudden calamity. A measured response, indeed, in a world where every whisper of policy can send tremors through the financial cosmos. 🌌

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2025-12-15 15:25