Expert Analyzes Yen’s Impact on Bitcoin’s Trajectory

The depreciation of the yen against the dollar has bolstered risk appetite in the segment of risky assets, thereby supporting Bitcoin. This was stated by derivatives trader Gordon Grant to The Block.

The specialist explained the rally of the leading cryptocurrency, which surged over 8% following the Federal Reserve’s 50 basis point rate cut. On the night of September 20, prices tested $64,000, whereas after the Fed’s decision two days earlier, they had fallen to $59,250.

This movement occurred amid the weakening of the JPY against the USD due to the strengthening of the carry trade, he noted.

According to the expert, Bitcoin can be perceived both as a “reverse analogue of the dollar” and as a high-beta asset. In other words, digital gold appreciates when sentiment in risky instruments improves.

On Friday, the Bank of Japan’s decision to refrain from tightening monetary policy provided a stimulus for a new wave of yen weakening.

The Fed’s verdict may signal to the market a slowing economy, hinting at underlying issues that may not yet be apparent, noted 21Shares.

“Potentially, this could trigger volatility. In the long term, Bitcoin and other digital assets have historically thrived in low interest rate environments,” analysts explained.

Valentin Fournier from BRN expressed caution, noting the potential for the leading cryptocurrency to retreat to around $56,000, where he recommended strengthening long positions.

Former BitMEX CEO Arthur Hayes highlighted the potential for a decline in stocks and other risky assets a few days after the Fed meeting on September 18. He based his forecast on the unwinding of carry trade positions in the yen due to the narrowing interest rate differential between the US and Japan.

Previously, the expert described the leading cryptocurrency as a more reliable safe-haven asset than gold, due to the absence of national control. He predicted the market’s exit from a bearish sideways trend from September amid expectations of new stimuli in the US.