The Japanese yen tumbled to its weakest level in nearly 40 years against the U.S. dollar, triggering a wave of risk aversion that dragged Bitcoin down over 1% on Tuesday. The largest cryptocurrency slipped below the $60,000 psychological mark and continued to trade under its 200-week simple moving average, compounding technical pressure.
Strategy Flips Script: Up to $1B in Bitcoin Sales Ahead
Beyond macro headwinds, a whale dumping risk looms. Strategy, the publicly traded company with the largest Bitcoin treasury, announced plans to repurchase up to $1 billion of its STRK preferred shares and MSTR common stock. To fund the buybacks, dividends, and dollar reserves, the firm intends to sell Bitcoin — a direct departure from founder Michael Saylor's longstanding mantra of 'Never Sell Your Bitcoin.'
Jeff Dorman, CIO of crypto asset manager Arca, called the move 'kicking the can down the road' on X, estimating it buys only one to two years. He argued that no plan can satisfy all capital structure stakeholders unless Bitcoin skyrockets, and warned Saylor may repeat past mistakes — losing roughly $40 billion in enterprise value while paying off $1.5 billion in debt.
Yen Carry Trade: A Ticking Time Bomb
Currency markets are fixated on the yen, which slid to 162.40 per dollar in Asian trading — the lowest since October 1986. The yen has depreciated about 57% against the greenback since 2021, driven by the Federal Reserve's rate hikes above 5% versus the Bank of Japan's near-zero policy, now barely at 1% against 3.5% in the U.S. The low-rate yen has long fueled global carry trades, where investors borrow cheaply to buy stocks, bonds, and crypto. With Japan's debt-to-GDP exceeding 220%, the BOJ faces a dilemma: raising rates could trigger a fiscal crisis, while inaction weakens the yen further. Analysts warn that forced BOJ tightening or intervention could unleash a massive carry trade unwind, hitting equities, bonds, and crypto alike.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.