Bitcoin rebounded on Friday despite the Bank of Japan (BoJ) raising interest rates to their highest level in 30 years, as traders interpreted the move as ultimately supportive for risk assets rather than a tightening shock.Bitcoin rose roughly 2.5% intraday, reclaiming the $88,000 level as U.S. equity futures also advanced, signaling renewed risk appetite across global markets.Japan Raises Rates to 30-Year Highs, Markets React BullishlyThe Bank of Japan lifted its policy rate to approximately 0.75%, ending the country’s latest era of ultra-cheap money and marking the highest borrowing costs since the mid-1990s.While rate hikes are typically viewed as headwinds for crypto and equities, the market reaction was notably bullish. Investors appear to be betting that Japan’s tightening cycle is nearing its limit, especially amid mounting fiscal and political constraints.Former BitMEX CEO Arthur Hayes framed the move as explicitly inflationary rather than restrictive.“Don’t fight the BOJ: negative real rates is the explicit policy,” Hayes wrote on X.“$JPY to 200, and $BTC to a milly.”His comments reflect a broader view that Japan’s monetary policy will continue to weaken the yen over time, potentially driving capital toward hard assets like Bitcoin.Analysts Say Japan Likely Done Hiking RatesResearch firm Temple 8 Research argued that while markets may perceive a hawkish pivot, Japan faces a hard ceiling on further tightening.“The market sees a hawkish pivot. We see a political ceiling,” the firm wrote.Temple 8 noted that Japan’s latest $140 billion fiscal stimulus package makes additional rate hikes increasingly untenable. If policy rates were to rise toward 1.5%, interest payments on government debt would surge, creating fiscal instability.“You cannot floor the gas (fiscal stimulus) while slamming the brakes (rate hikes),” the report said.The firm expects no additional BoJ rate hikes before 2027, reinforcing the case for continued yen depreciation.Bitcoin Tracks Equity Futures HigherBitcoin’s rebound coincided with gains in U.S. stock index futures ahead of the Wall Street open. At press time:Nasdaq 100 futures were up about 1.5%S&P 500 futures were attempting a rebound after recent consolidationAccording to Mosaic Asset Company, improving sentiment indicators could support a year-end rally.“With participation remaining strong and investor sentiment shifting back toward fear, that’s historically a constructive setup for a rally in the final weeks of the year,” the firm said.Seasonality also favors upside, with the second half of December historically positive for U.S. equities.Bitcoin Still Searching for a Durable BottomDespite the bounce, analysts caution that Bitcoin’s bottoming process may not yet be complete.BTC briefly fell to $84,390 earlier this week following unexpectedly hot U.S. inflation data, triggering renewed volatility and cautious positioning among traders.On-chain analytics platform Checkonchain warned that Bitcoin has yet to experience a definitive capitulation event.“Bitcoin is currently hammering out a bottom, but the process is far from over,” the firm said.Checkonchain highlighted $81,000 — the average cost basis of U.S. spot Bitcoin ETFs — as a critical support level. A sustained break below that zone could invite further downside, while holding above it would strengthen the case for a medium-term recovery. Macro TakeawayMarkets appear to be interpreting Japan’s rate hike not as the start of aggressive tightening, but as a symbolic move within a structurally accommodative framework. Combined with expectations of ongoing global liquidity support, this backdrop is helping Bitcoin stabilize after recent drawdowns.While short-term volatility remains elevated, the convergence of weak yen dynamics, easing global policy expectations, and institutional accumulation continues to underpin Bitcoin’s longer-term bullish thesis.
Hui Xin
Kikyo
Jasper
Catherine
Alex
Clement
Brian