$BTC
The cryptocurrency markets witnessed a sharp decline after the yield on 10-year Japanese government bonds rose to 1.84% — the highest level since 2008. This increase triggered a global wave of risk reduction and led to one of the largest liquidations in recent weeks.
For many years, investors relied on Japan as a 'zero interest' country, where they could borrow yen at almost no cost and then invest in high-yield assets around the world in what is known as the Carry Trade.
Rising yields mean expectations of an increase in interest rates in Japan, raising borrowing costs and forcing many investors to close their global positions, generating sudden selling pressure on stocks, currencies, and crypto.
As the risks of unwinding Carry Trade positions increased, markets became more volatile and turbulent.
