Bitcoin Price Drop Linked To Japanese Government Bonds

After a brief period of consolidation and a bullish uptick to around $93,000 at the end of last week, the Bitcoin price has once again dipped toward the $85,000 mark, recording a significant 7% drop on Monday, according to data from CoinGecko. 

Market expert Shanaka Anslem has pointed to what he refers to as “the weapon” behind this latest crash: Japanese government bonds. 

Expert Warns Of Unraveling Yen Carry Trade

In a post on social media platform X (formerly Twitter), the expert highlighted that the yield on Japan’s 10-year bonds reached 1.877 percent on December 1, 2025—the highest level since June 2008—while the 2-year yield hit 1 percent, a benchmark not seen since before the collapse of Lehman Brothers.

He explained that these rising yields have triggered a significant unwinding of what Anslem describes as the largest arbitrage trade in history: the Yen Carry Trade. 

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With estimates placing the total size of this trade at around $3.4 trillion and figures nearing $20 trillion, he noted that this allowed global investors to borrow Japanese yen at minimal costs to buy a variety of assets, including stocks, US Treasuries, and cryptocurrencies like Bitcoin. However, this era appears to have ended last month.

The mechanics of this situation are straightforward but impactful, Anslem asserted. As yields rise, the yen strengthens, making leveraged positions increasingly unprofitable. 

He suggested that this leads to a chain reaction: selling triggers margin calls, which in turn causes further liquidations. On October 10, $19 billion in crypto positions were liquidated, marking the largest single-day wipeout in crypto history.

By November, Bitcoin exchange-traded funds (ETFs) saw $3.45 billion exit the market, with BlackRock’s IBIT suffering a $2.34 billion loss. On December 1 alone, an additional $646 million was liquidated before lunchtime.

Will The Bitcoin Price Plunge To $75,000?

This decline has occurred alongside the Bitcoin price correlations with major stock indices, showing a 46% correlation with the Nasdaq and a 42% correlation with the S&P 500. 

Anslem noted in his analysis that what was once perceived as an “uncorrelated hedge” has now transformed into a leveraged indicator of global liquidity conditions.

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Interestingly, despite the Bitcoin price collapse, whale investors accumulated 375,000 BTC during this period. Moreover, miners significantly cut back their selling, reducing monthly sales from 23,000 BTC to just 3,672. 

As the market looks ahead, the expert asserted that a pivotal moment approaches on December 18 with the Bank of Japan’s upcoming policy decision. 

Anslem concluded that if the bank opts to raise rates and signal further increases, the Bitcoin price could test the $75,000 level, which would represent an additional 11% drop for the market’s leading cryptocurrency from current trading levels. 

Featured image from DALL-E, chart from TradingView.com