The $14 Trillion Time Bomb: How a Japanese Trading Strategy Could Wipe Out 40% of Your Crypto Portfolio

Imagine you’re standing on a beach, enjoying a beautiful sunny day. The water is calm, people are swimming, and everything seems perfect. But what you don’t see is that far out in the ocean, an underwater earthquake has just occurred. A massive tsunami is building, racing toward shore at hundreds of miles per hour—and most people on the beach have no idea what’s coming.

This is exactly where cryptocurrency investors find themselves in November 2025. While Bitcoin hovers around $102,000, Ethereum trades near $3,300, and Solana sits at $186, a financial tsunami is building across the Pacific Ocean in Tokyo. It’s called the yen carry trade unwind, and it has already caused one devastating crash. The next one could be even worse.

In just the past 24 hours, the crypto market shed over $1.13 billion in liquidations as Bitcoin briefly crashed below $100,000 for the first time since May. U.S. spot Bitcoin ETFs have seen outflows of nearly $2 billion over the past five trading days, with Fidelity’s FBTC leading the exodus with $356.58 million leaving the fund. This isn’t random volatility—it’s the carry trade beginning to crack.

Let me explain what’s happening, why your crypto investments are at extreme risk, and what the warning signs look like. I’ll use simple examples throughout so anyone can understand this, even if you’ve never heard of the yen carry trade before.

Part 1: The World’s Most Profitable Money-Making Machine

The Basic Concept: Borrowing Cheap, Investing Expensive

Think of the yen carry trade like this: Imagine if your friend offered to lend you $100,000 at 0.5% interest per year—basically almost free money. You take that loan, walk across the street to another bank, and deposit that money in an account paying 5% interest. At the end of the year, you pay your friend $500 in interest, collect $5,000 from the bank, and pocket the $4,500 difference. Free money, right?

This is essentially what’s been happening on a massive scale for over two decades. The Bank of Japan maintained ultra-loose monetary policies, sustaining a zero or negative interest rate environment to fight deflation and stimulate economic growth. Meanwhile, interest rates in the United States climbed significantly higher, especially since 2022 when the Federal Reserve started fighting inflation.

At the peak earlier this year, the spread hovered near 400 basis points (4.0%), with US rates at approximately 5.0% and Japanese rates around 0.5%. That’s an enormous difference—essentially a money-printing machine for anyone who could access it.

Who’s Playing This Game? Everyone

Here’s where it gets scary: It’s not just a few hedge funds doing this. The yen carry trade has grown into a $14 trillion monster that includes:

• Massive hedge funds borrowing billions to invest in US stocks and bonds
• Investment banks using cheap yen to fund their trading operations
• Japanese housewives (seriously—they’re nicknamed “Mrs. Watanabe” in financial circles) trading currencies on their smartphones
• Pension funds trying to generate returns for retirees
• And increasingly, cryptocurrency traders using borrowed yen to buy Bitcoin, Ethereum, and Solana

The estimates of how big this trade has become are staggering. Conservative estimates place the trade’s size at up to $14 trillion—over three times the entire cryptocurrency market capitalization. Some experts like BitMEX co-founder Arthur Hayes put it even higher. Citing Deutsche Bank research, Hayes stated that Japan is running $24 trillion worth of risk on the yen carry trade.

To put this in perspective: If the entire global cryptocurrency market is worth about $3.6 trillion, and the yen carry trade is $14-24 trillion, that’s like having a 100-pound bowling ball balanced on top of a 30-pound cardboard box. When the bowling ball moves, the box doesn’t stand a chance.

The Fatal Flaw: Currency Risk

Remember our simple example where you borrowed money from one friend to deposit with another? There’s a catch I didn’t mention: What if halfway through the year, your friend suddenly says “Actually, I need you to pay me back in gold instead of cash, and gold just doubled in price”?

Suddenly your free money scheme becomes a disaster. You owe twice as much as you borrowed, and any profits you made are wiped out.

This is exactly what happens when the Japanese yen strengthens against the US dollar. Let me show you with real numbers:

Example: The Trader’s Nightmare

Sarah is a crypto trader who discovered the yen carry trade in early 2024:

1. January 2024: She borrows 100 million yen when the exchange rate is 150 yen per dollar, giving her $666,667
2. She invests that $666,667 in Bitcoin at $45,000, buying 14.8 BTC
3. Fast forward to August 2024: Bitcoin rises to $60,000 (great!), so her 14.8 BTC is now worth $888,000 (33% profit!)
4. BUT: The yen has strengthened dramatically. Now the exchange rate is 130 yen per dollar
5. To pay back her 100 million yen loan, she now needs $769,231—not $666,667
6. The damage: She needs $769,231 to pay back the loan, but only has $888,000 from her Bitcoin sale. After repaying the loan, she’s left with $118,769
7. The real profit: She actually only made $118,769 - $666,667 = -$547,898… She lost $547,898 despite Bitcoin going up 33%!

This is why currency movements can destroy carry trades. And in August 2024, that’s exactly what happened—to thousands of traders simultaneously.

Part 2: August 5, 2024 – The Dress Rehearsal for Disaster

The Day Everything Broke

August 5, 2024, will be remembered as one of the most terrifying days in modern financial history. On July 31, the Bank of Japan raised rates from 0% to 0.25%—for the first time in 17 years. That tiny quarter-point increase triggered a financial earthquake that nearly broke global markets.

Here’s what happened in just 24 hours:

The Cryptocurrency Massacre:

• Bitcoin, which had been trading close to its all-time high just weeks earlier, plummeted below $50,000
• Ethereum crashed 26%, and more than $1 billion in leveraged trading positions were liquidated in just 24 hours
• Bitcoin’s yen-denominated price tanked nearly 15% on the Tokyo-based bitFlyer exchange, showing that Japanese investors were panic-selling even more aggressively than Americans

The Global Contagion:

• The S&P 500 fell more than 5%—its worst one-day drop since the early days of COVID
• Japan’s stock market crashed 12%—its worst day since the legendary Black Monday crash of 1987
• The VIX fear index spiked above 60, a level associated with full-blown financial panic

The Domino Effect: How One Rate Hike Crashed Everything

Let me walk you through exactly how this cascade worked:

Step 1: The Rate Hike The Bank of Japan raised rates by 0.25%. Doesn’t sound like much, right? But for carry traders, this narrowed their profit margin from 4.5% to 4.25%. More importantly, it signaled that Japan’s era of free money might be ending.

Step 2: The Yen Surges Investors who had been betting against the yen for years suddenly reversed course. The Japanese yen surged nearly 7% against the US dollar in mid-July 2024. In currency markets, a 7% move in three weeks is like an earthquake—currencies usually move 1-2% per month.

Step 3: Margin Calls Begin Remember Sarah from our earlier example? Multiply her by 10,000. Traders around the world suddenly owed much more on their yen loans than they had borrowed. Their brokers started calling: “Put up more cash immediately, or we’ll liquidate your positions.”

Step 4: The Fire Sale Here’s where it gets really ugly. When you get a margin call, you typically have hours—not days—to come up with cash. Most traders couldn’t wire millions of dollars that quickly, so they had one choice: sell everything.

And what do you sell first? The most liquid assets—the ones you can unload instantly. That means:

• US technology stocks (Nvidia, Microsoft, Tesla)
• Cryptocurrency (Bitcoin, Ethereum, Solana)
• Any other liquid investment that trades 24/7

Jump Crypto, a major trading firm, dumped around $277 million worth of Ethereum, transferring it to exchanges including Binance, OKX, Coinbase, Bybit, and Gate.io. This wasn’t profit-taking—it was an emergency evacuation.

Step 5: The Cascade The strong negative reaction of cryptoassets, with Bitcoin and Ethereum posting losses of up to 20%, suggests that retail traders faced margin calls and were forced to close positions even in seemingly unrelated assets.

As prices fell, more traders hit their liquidation levels. Their positions were automatically sold by exchanges, pushing prices even lower. This triggered more liquidations. And more. And more. It’s like a row of dominoes, except each domino is worth millions of dollars.

The False Relief

After a few terrifying days, markets stabilized. The Bank of Japan essentially backed down, signaling they wouldn’t raise rates aggressively. The panic subsided. Bitcoin recovered. Headlines declared the crisis over.

But here’s the disturbing truth: As of mid-August, JP Morgan Investment Bank estimated that only 65-75% of global carry trade positioning had been unwound.

Think about what that means. Three-quarters of the trade unwound, and it nearly broke the financial system. The remaining quarter is still out there. And now, in November 2025, those positions are under pressure again—only this time, the market conditions are even more dangerous.

Part 3: November 2025 – The Storm Gathers Again

Current Market Conditions: We’re in the Danger Zone

As I write this on November 5, 2025, multiple warning signs are flashing red:

1. Bitcoin ETF Hemorrhaging The 12 spot Bitcoin ETFs recorded their fifth straight day of net outflows on November 4, with investors withdrawing $577.74 million from the funds in a single day, with Fidelity’s FBTC leading outflows at $356.58 million.

Over the past week, nearly $2 billion has fled Bitcoin ETFs. This isn’t retail investors panic-selling—this is institutional money heading for the exits. And when the smart money leaves, there’s usually a good reason.

2. Liquidation Cascade Started In the past 24 hours, $472 million in positions were liquidated, of which $413 million were long positions. That 90% long-to-short ratio tells you everything: people were betting prices would go up, and they got crushed.

3. Bitcoin Breaks Key Support Bitcoin briefly fell below the psychological $100,000 level for the first time since May, reaching a daily low of $99,076. This isn’t just a number—$100,000 had held as solid support for months. Breaking it suggests something fundamental has shifted.

4. Altcoins Getting Slaughtered Ethereum tumbled nearly 16% to $3,060 levels in the last 24 hours, cracking more than 38% from its all-time high hit 2 months ago, wiping out all gains of 2025.

Solana, with its notorious volatility, is facing even worse pressure. SOL saw $52.1 million in liquidations as price broke below $160 support, combining crypto-wide deleveraging with broken technical levels.

The Perfect Storm: Three Forces Converging

What’s driving this? It’s not one thing—it’s three major forces coming together at the worst possible time:

Force #1: The Interest Rate Scissors

The profit in carry trades comes from the difference between Japanese and US interest rates. That gap is closing from both sides like a pair of scissors:

• The Federal Reserve is getting ready to cut US rates as the economy slows
• The benchmark interest rate in Japan was last recorded at 0.50 percent, and the Bank of Japan keeps hinting at more increases

As of mid-2025, the spread between US and Japanese rates is expected to compress further as the Fed embarks on a rate-cutting cycle while the BOJ holds rates steady.

When that 4% gap shrinks to 3%, then 2%, then 1%, the carry trade stops being profitable. And when a $14 trillion trade stops being profitable, everyone rushes for the exit at the same time.

Force #2: The Yen Is Strengthening

The USD/JPY pair is hitting fresh lows, slipping under 150 levels. Remember, when USD/JPY falls, that means the yen is getting stronger—and that’s poison for carry trades.

Currency traders watch this level obsessively. If USD/JPY breaks below 145, and especially if it crashes below 140, expect panic.

Force #3: Market Fear Is Rising

The market is in “Extreme Fear” with the CMC Fear & Greed Index at 20, and the altcoin season index at only 26 as Bitcoin dominance rises.

When fear dominates, investors don’t take risks. They don’t buy dips. They sell and move to safety. This creates a self-fulfilling prophecy where falling prices cause more fear, which causes more selling.

Part 4: Why Cryptocurrencies Are Sitting Ducks

You might be thinking: “Okay, but why should I care about Japanese interest rates if I own Bitcoin? Isn’t crypto supposed to be independent from traditional finance?”

Great question. And the brutal answer is: Crypto has become deeply intertwined with traditional finance through the carry trade. Here’s why crypto is especially vulnerable:

The Dollar Connection

First, understand that crypto prices move inversely to the strength of the US dollar. The Dollar Index had a correlation of -0.65 with Bitcoin in the first quarter of 2024, showing how deeply the world’s monetary system impacts Bitcoin.

When the dollar is weak, crypto tends to rise. When the dollar is strong, crypto tends to fall. This makes sense—if you’re a global investor and the dollar is strengthening, you move money into dollars and out of alternatives like crypto.

But here’s the twist with the yen carry trade: When it unwinds, BOTH the dollar and crypto fall together, breaking this normal relationship. Why? Because forced liquidations overwhelm everything else.

Liquidity: The Blessing That Becomes a Curse

Cryptocurrency’s 24/7 trading is usually seen as revolutionary. No waiting for markets to open. No trading halts. Buy and sell whenever you want.

But when margin calls hit at 3 AM Tokyo time, this becomes crypto’s Achilles’ heel. You can’t sell your stocks or bonds—those markets are closed. But you CAN sell your Bitcoin instantly, anywhere in the world.

The strong negative reaction of cryptoassets, with Bitcoin and Ethereum posting losses of up to 20%, suggests that retail traders faced margin calls and were forced to close positions even in seemingly unrelated assets.

Picture a burning building with two exits: one (stocks) that’s only open 8 hours a day, and one (crypto) that’s always open. When the fire starts, everyone rushes to the exit that’s actually open—the crypto markets.

Leverage: Amplifying the Pain

Cryptocurrency exchanges offer insane amounts of leverage. On some platforms, you can control $100 worth of Bitcoin with just $1 of your own money—that’s 100x leverage.

This works great when prices go up. Your $1 becomes $2 (100% gain!). But when prices go down by just 1%, you’re completely wiped out. Your $1 becomes $0, and the exchange automatically liquidates your position.

More than $1 billion in leveraged trading positions were liquidated between August 4-5, 2024, creating a cascade where forced selling triggered more forced selling.

And we’re seeing it happen again right now in November 2025. Over $1.6 billion in long positions were liquidated across crypto markets on November 4-5, 2025, with SOL seeing $52.1 million in liquidations as price broke below $160 support.

Part 5: The Vulnerability Hierarchy – Ranking Your Risk

Not all cryptocurrencies face equal danger from a carry trade unwind. Let’s break down the top three by market cap and see who’s most at risk:

Bitcoin: The Least Worst Option (But Still Terrible)

Current Status:

• Price: Around $102,105 as of November 4
• Down 8% in October—its worst month in years
• Briefly broke below $100,000 for the first time since May

Why It’s Vulnerable: Bitcoin is the most liquid cryptocurrency in the world. When traders need cash fast, Bitcoin is always the first thing they can sell. Think of it like having the most popular house in a neighborhood during a fire sale—it’ll sell fast, but probably at a bad price.

Why It’s Less Vulnerable Than Others: Bitcoin has the strongest brand recognition and is increasingly seen by institutions as “digital gold.” Some investors actually buy Bitcoin during crises as a hedge. It also has a fixed supply cap of 21 million coins, which provides fundamental value support.

In a major unwind scenario: Expect Bitcoin to drop 15-25% within days, potentially retesting the $85,000-$95,000 range. However, it will likely recover faster than other cryptocurrencies once the panic subsides.

Ethereum: The Middle Ground (Moderate to High Risk)

Current Status:

• Price: Around $3,293 (down 5.7% on November 4)
• Tumbled to $3,060 levels in the last 24 hours, cracking more than 38% from its all-time high of $4,954 hit 2 months ago
• Wiped out all gains made in 2025

Why It’s More Vulnerable Than Bitcoin: Ethereum has complex derivative markets and is often used in sophisticated trading strategies involving borrowed money. It’s also deeply integrated with DeFi (decentralized finance), which tends to amplify volatility in both directions.

Following the general crypto market crash, ETH recorded losses of 47% since the beginning of 2025, with the ETH/BTC ratio plunging to all-time lows.

The DeFi Connection: Ethereum powers most of the DeFi ecosystem. When carry trades unwind, DeFi protocols face liquidity crunches. People pull money out of lending pools, liquidate positions, and stop using these protocols. This creates a vicious cycle that hammers ETH harder than BTC.

In a major unwind scenario: Ethereum could drop 20-35%, potentially falling to the $2,300-$2,700 range. Its recovery may take longer than Bitcoin’s due to the DeFi complexity.

Solana: The Danger Zone (EXTREME Risk)

Current Status:

• Price: Around $186-$198 (sources vary slightly)
• Recently broke support levels
• SOL dropped 6.36% in 24 hours, underperforming the broader crypto market, with $52.1 million in liquidations as price broke below $160 support

Why Solana Is the Most Dangerous Position:

1. Insane Volatility: SOL has generally been more volatile with a realized volatility near 80%, twice as high as Bitcoin and nearly one-third higher than Ether.

Let me put this in perspective: If Bitcoin moves 10%, Ethereum might move 15%, but Solana could easily move 20-25%. It’s like being on a roller coaster versus being on a rocket ship—same direction, but MUCH more violent movements.

2. High Correlation = Double Trouble: Solana maintains a strong correlation with Bitcoin at 0.92. Plus, Solana and Ethereum’s price correlation has mostly sat in the +0.7 to +0.8 range.

This means Solana gets hit from BOTH directions. When Bitcoin falls, Solana falls even harder. When Ethereum crashes, Solana gets dragged down with it. It’s like being in a car that’s attached to two other cars by chains—wherever they go, you’re getting pulled along, but more violently.

3. Retail Leverage Paradise: Solana is hugely popular with retail traders who love to use high leverage. The platform is fast and cheap, making it perfect for leverage-seeking degenerates (that’s actually what they call themselves—“degen” is a badge of honor in Solana communities).

When margin calls hit, these leveraged positions explode in cascading liquidations.

4. The “Fast Money” Crowd: Solana attracts a lot of speculative capital—people looking for quick gains rather than long-term holdings. This “hot money” is the first to flee during crises.

Recent Warning Signs: SOL’s drop combines crypto-wide deleveraging, broken technical levels, and jitters around concentrated holdings, with negative funding rates discouraging new long positions.

In a major unwind scenario: Solana could crater 25-40% or more, potentially testing the $120-$140 range. Its high volatility means it could bounce back quickly—or keep falling if panic accelerates. It’s the highest risk/highest reward position in a crisis.

The Verdict: If you own Solana, you’re essentially making a bet that the carry trade won’t fully unwind in the near term. That might be a winning bet—or it might cost you 40% of your investment in a matter of days. Position accordingly.

Part 6: Warning Signs and What to Watch

How will you know if the big unwind is starting? Here are the specific indicators to monitor:

Signal #1: USD/JPY Exchange Rate (The Big One)

The USD/JPY pair is hitting fresh lows, slipping under 150 levels. Think of this like a dam with water levels marked on the side:

• 155-160: Safe zone (for now)
• 145-150: Caution zone—carry trades under pressure
• 140-145: Danger zone—expect volatility
• Below 140: PANIC ZONE—massive unwind likely happening

If you see USD/JPY falling rapidly (especially dropping 2-3 yen in a day), that’s your warning siren.

Signal #2: Bitcoin ETF Flows (Follow the Smart Money)

U.S. spot Bitcoin ETFs have seen outflows of nearly $2 billion over the past five trading days. This is institutional money—pension funds, hedge funds, and wealthy investors—heading for the exits.

When the smart money runs, you should pay attention. Check ETF flow data daily at sources like SoSoValue or CoinGlass. If you see:

• 3+ consecutive days of outflows: Yellow alert
• 5+ consecutive days totaling over $1 billion: Red alert
• Single day outflows exceeding $500 million: Consider defensive action

Signal #3: VIX Index (The Fear Gauge)

The Bank of Japan’s rate hike in 2024 shot the VIX above 60 and ignited a roughly 10% correction in the S&P 500.

The VIX measures expected volatility in the stock market:

• 0-15: Calm market
• 15-25: Normal volatility
• 25-35: Elevated fear
• 35-50: High fear
• 50+: Panic mode

When the VIX spikes above 35, crypto typically gets hammered. Above 50, expect carnage.

Signal #4: Bank of Japan Announcements

Market participants are closely watching the BoJ’s policy meetings, with hawkish remarks from BoJ Governor Kazuo Ueda fueling anticipation and driving Japanese Government Bond yields to multi-year highs.

Any surprise rate hike from the BoJ should send you running for cover. Follow financial news closely around BoJ meeting dates. If Governor Ueda uses words like “further normalization” or “additional tightening,” translate that to: “Warning: tsunami incoming.”

Signal #5: Liquidation Data (The Canary in the Coal Mine)

Over $1.6 billion in long positions were liquidated across crypto markets on November 4-5, 2025, marking the largest single-day flush since September.

Check liquidation data on Coinglass or similar platforms. If you see:

• Single day liquidations exceeding $500 million: Warning sign
• Single day liquidations exceeding $1 billion: Danger
• Multiple days of $500M+ liquidations: The unwind may be starting

Signal #6: Cross-Currency Correlation

In August 2024, rising macroeconomic concerns pushed investors towards the Yen, causing Bitcoin to drop about 8.5% that month and Ethereum to lose more than 20%.

If you notice that Bitcoin, Ethereum, and Solana are all falling sharply while the yen is strengthening, that’s not a coincidence—it’s the carry trade unwinding.

Part 7: Practical Defense Strategies

Okay, so you understand the threat. What should you actually DO about it?

Strategy 1: Position Sizing—Don’t Bet the Farm

The first rule of surviving a potential disaster: Don’t have so much exposure that a 40% drop ruins you.

If Solana represents 80% of your portfolio and it crashes 35%, you just lost 28% of your entire net worth. Could you handle that emotionally? Financially?

A more prudent allocation might be:

• 50% Bitcoin (least volatile, most likely to recover)
• 30% Ethereum (middle ground)
• 20% Solana (highest risk/reward)

Or even more conservative:

• 40% Bitcoin
• 25% Ethereum
• 15% Solana
• 20% Stablecoins or cash (for buying the crash)

Strategy 2: Have Dry Powder for the Crash

Here’s a counterintuitive truth: A carry trade unwind could be the buying opportunity of a lifetime—IF you have cash ready.

In August 2024, those who had money ready and bought Bitcoin at $50,000 saw it rally back to $70,000+ within weeks—a 40% gain.

Keep 20-30% of your intended crypto allocation in stablecoins or cash. When (not if) the crash comes, you’ll be buying while everyone else is panic-selling.

Strategy 3: Use Stop Losses—But Set Them Wisely

Stop losses can save you from disaster, but they need to be set correctly:

• Too tight (5-10% below current price): You’ll get stopped out by normal volatility
• Too wide (30%+ below current price): You’ll ride losses too far down
• Just right (15-20% below current price): Protects you from disasters while avoiding normal noise

For example, if you own Solana at $190:

• Stop loss at $152 (20% down) protects you from a full crash to $120
• You’ll take a 20% hit, but you’ll avoid a potential 40% catastrophe

Strategy 4: Diversify Beyond Crypto

Don’t have 100% of your wealth in cryptocurrency. The carry trade affects everything, but having some allocation to:

• Gold (traditional safe haven)
• US Treasury bonds (benefit from safe-haven flows)
• Cash (boring but safe)

This provides a buffer when crypto crashes.

Strategy 5: Understand Your Time Horizon

Are you trading or investing?

If you’re a trader (weeks to months):

• Watch the warning signs daily
• Be ready to cut losses quickly
• Consider reducing exposure preemptively

If you’re a long-term investor (years):

• Crashes are buying opportunities
• Don’t panic-sell at the bottom
• Use crashes to accumulate more at better prices

The worst thing you can do is be a long-term investor until prices crash, then panic and become a short-term trader who sells at the bottom.

Conclusion: Living with the Time Bomb

Let’s be clear about what we’ve learned:

1. The yen carry trade is enormous: $14-24 trillion in borrowed money propping up global assets including crypto

2. August 2024 was a warning shot: Only 65-75% of the trade unwound, and it nearly broke markets. The remaining 25% is still out there.

3. The conditions are worse now: Interest rate differentials are narrowing, the yen is strengthening, and nearly $2 billion has fled Bitcoin ETFs in just five days

4. Crypto is extremely vulnerable: 24/7 trading, high leverage, and liquidity make it a prime target for forced liquidations

5. The Big Three have different risk levels:

• Bitcoin: 15-25% potential drop
• Ethereum: 20-35% potential drop
• Solana: 25-40% potential drop

6. This WILL happen eventually: The only questions are when and how bad

Analysts call this scenario a potential ‘Black Swan’—a rare, unpredictable event with global consequences. But here’s the thing about Black Swans: Once you know they exist and understand how they work, they’re not really unpredictable anymore.

You can’t stop a tsunami. But you can see it coming and get to higher ground.

The yen carry trade unwind is coming. It might be next week, next month, or next quarter. It might be gradual, or it might be violent. But it’s not a matter of “if”—it’s a matter of “when” and “how bad.”

If a rate hike happens, investors will sell their global assets and convert them into yen to repay their debt, bringing massive short-term selling pressure similar to August 2024. Only this time, with $2 billion already fleeing Bitcoin ETFs and markets showing cracks, the second tsunami could be even bigger than the first.

The question is: Will you be one of the people caught on the beach, or will you be on higher ground with cash ready to buy the assets everyone else is panic-selling?

Stay vigilant. Watch the yen. And remember: In global financial markets, what happens in Tokyo doesn’t stay in Tokyo. It shows up in your crypto portfolio, usually at 3 AM when you least expect it.

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Key Takeaways

• The yen carry trade is a $14-24 trillion borrowed money strategy that’s been propping up global markets for decades
• August 2024’s crash was just 65-75% of the unwind—the rest is still out there waiting to detonate
• Bitcoin could drop 15-25%, Ethereum 20-35%, and Solana 25-40% in a full unwind scenario
• Watch USD/JPY exchange rates, Bitcoin ETF flows, and liquidation data for early warning signs
• Position size appropriately and keep cash ready to buy the inevitable crash

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Disclaimer: This article is for educational purposes only and should not be considered financial advice. The author may hold positions in mentioned cryptocurrencies. Always conduct your own research and consult with a qualified financial advisor before making investment decisions. Cryptocurrency investments carry substantial risk of loss.