The pressure for interest rate hikes in Japan continues to escalate, with the probability of a 25bp rate increase in December already climbing to 81% on Polymarket. At the same time, Japan's 2-year and 5-year government bond yields have both reached new highs since 2008, and the yen is rapidly appreciating. These signals combined essentially tell the market: Japan's decades-long ultra-loose monetary policy is coming to an end.

Once Japan raises interest rates, global risk assets may be affected. This is because the scale of yen carry trades could reach as high as $3–5 trillion, a significant amount of which has flowed into the cryptocurrency market. Once the interest rate differential narrows, funds will withdraw, which is also one of the reasons why Jump cleared out ETH earlier. Cryptocurrency has the best liquidity; whenever the market needs cash, it is always the first to be sold off.

However, from past examples, truly valuable assets will not be killed by liquidity issues. Short-term funds may be passively withdrawn, but they will eventually flow back in various forms. For instance, after 1011, Tether and Circle collectively issued nearly $20 billion in a month. Although prices are currently pressured by DAT, ETF outflows, and declining expectations for interest rate cuts, these are merely short-term factors and do not affect the larger logic of "the world continues to print money, and Bitcoin remains the on-chain gold" in the long-term cycle.

In the primary market alpha sector, $FIR has been very volatile today, looking like it is in motion, and the chips have been almost fully absorbed, so a surge could happen at any time. The AI + music sector is considered a leader and can be monitored closely.