Bitcoin (BTC), the cryptocurrency, grew 5% at US trading times to $81,000.
Important points
- Bitcoin is trading above $81,000, up more than 5 percent in just the past 24 hour.
- USD/JPY falls to 155.4 due to suspected Bank of Japan intervention. The US Dollar Index (DXY), which is a measure of the US dollar’s value, drops to 99.
- The odds of a BOJ interest rate hike have fallen from 12 to 1 percent, and a 95-percent probability has been priced for the increase on September 18.
Weaker dollar drags crypto higher
BTC was trading around $81,000 at the time this article was written, which is near to its highs from last month.
It comes at a time when the Japanese yen has continued to gain strength in an apparent central bank intervention. Cointelegraph first reported on Wednesday. The USD/JPY fell to 155.4 after dropping as low as 158.5 on Tuesday. DXY fell from 99 to 99. In the past, a decline in DXY was positive for Bitcoin.
US Dollar Index Chart for One Day. Source: TradingView
Michael Saylor’s Strategy (MSTR), which is a stock of Michael Saylor, participated in this rally on Wednesday and saw its shares rise 8.6%. It is now up by 70% since its late-June low, though the stock has lost about 10% in value year-to date. Strategy’s perpetual prefer stock STRC — which was often compared to money market funds — is trading under its $100 par value and has remained at $97.80 as of this writing.
Related: Strategy turns 1,690 BTC into $108.6M STRC buyback
The impact of the yen’s intervention is a subject of disagreement among analysts
A new suspected yen-supporting intervention, combined with the possibility of an interest rate increase by the Bank of Japan later in the month, have revived concerns about another carry-trade destabilization.
“In the last 24 hours, USD/JPY has dropped almost 2.5%, which doesn’t happen without any major intervention,” The Macro Paper commented on X. “On top of that, BOJ is most likely expected to hike rates this month, with more rate hikes possible in Q4. This is the exact thing that happened in Q3 2024, when BOJ intervened and hiked rates together.”
Polymarket probability for BOJ to hold rates fell from 12 % to 1 % on Wednesday. This cements the possibility of an increase in interest rates. Current market implied probabilities of a BOJ 25-basis point hike on Sept. 18, are 98%.
Probabilities of BOJ’s rate decision for September 18. Source: Polymarket
Others have seen currency interventions as a positive for liquidity. Arthur Hayes of Maelstrom has held for a long time that the Foreign and International Monetary Authorities (FIMA), repo facility, will provide Japan dollar liquidity in exchange for Treasury collateral and ease liquidity conditions globally. Treasury Secretary Steven Mnuchin said no funds have appeared to be drawn so far from this facility. Scott Bessent raised the prospect Late July is the best time to visit.
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Source: cointelegraph.com
