Since 2024, Bitcoin (BTC) has posted four major corrections after interest rate hikes by the Bank of Japan (BOJ), with declines ranging from 18% to 28%. This dynamic places renewed attention on the BOJ’s June 16 policy decision.
Data currently point to a variety of pressures on BTC, with BTC whale distribution and exchange inflows possibly carrying more weight than Japanese monetary policy.
BOJ hikes and Bitcoin drawdowns: Will history repeat?
The relationship between BOJ policy and Bitcoin has gained attention because each rate increase since Japan ended its negative interest rate policy has been followed by a sizable correction.
Following the March 19, 2024, hike, Bitcoin corrected by 18%. The July 31, 2024, increase preceded a 18.5% decline.
After the Jan. 24, 2025, hike, Bitcoin fell nearly 25%, while the Dec. 19, 2025, decision was followed by a 28% drawdown.
Across the four events, Bitcoin’s average decline was 22.4%.
BTC/USD, one-week chart. Source: Cointelegraph/TradingView
The sell-offs did not occur under identical conditions. The March 2024 correction followed Bitcoin’s breakout to new all-time highs during the spot Bitcoin exchange-traded fund (ETF) cycle. The July 2024 decline followed months of consolidation below peak levels and coincided with the sharp unwind of the yen carry trade, which affected global markets.
The January and December 2025 drawdowns followed extended rallies and periods of contraction for both BTC spot and futures 30-day demand.
BTC: spot and perpetual futures demand growth contraction. Source: CryptoQuant
The relationship between BOJ policy and Bitcoin is often linked to the yen carry trade. For years, investors borrowed yen at low rates and deployed that capital into higher-yielding assets, including stocks and cryptocurrencies.
When the BOJ raises rates, some of those positions can be reduced, weighing on risk assets. The July 2024 hike coincided with one of the largest carry-trade unwinds in recent years and a sharp sell-off across global markets, not only BTC.
The influence of that particular condition appears smaller today. The BOJ has already raised rates to…
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