The Bank of Japan is making some big moves this time, with rumors swirling about tightening monetary policy. Anyone familiar with the markets knows that the yen has always been the cheapest funding tool globally. If they really tighten up, the impact won’t be small.

To put it simply, the yen carry trade playbook might become obsolete. In the past, institutions could borrow yen at low cost and then exchange it for dollars to buy up assets in various markets, with crypto being a major target. But once rates go up, the rules of the game change: borrowing costs shoot up, arbitrage opportunities shrink; if the yen appreciates, the pressure to repay debt increases sharply—what used to be an easy 1 million yen repayment could now cost a lot more; and worst of all, this could trigger a chain reaction of sell-offs—as institutions rush to unwind yen liabilities, they might have to sell Bitcoin for dollars and then convert those dollars back to yen, causing instant pressure on the markets.

Last year, the Bank of Japan only made a tentative move, and Bitcoin crashed in a flash that day. If they go all in this time, high-leverage positions might get wiped out first. Once liquidity tightens, volatility is bound to be much higher than usual.

That said, declines purely driven by liquidity crunches often create good buying opportunities. After the panic subsides, quality assets usually get repriced.

If a real drop happens, where do you think Bitcoin will fall to? $80,000 or even lower? Are you planning to wait and see, or do you already have your shopping list ready for a dip-buying spree?