Matrixport: The market tends to believe that the closing of yen arbitrage trades led to the sharp decline in Bitcoin

ChainCatcher news, the cryptocurrency research company Matrixport released an analysis report stating that the market tends to attribute the sharp decline in Bitcoin to the unwinding of yen carry trades.

Many financial market participants who borrowed yen to invest in high-yield assets are now reversing their positions, with Bitcoin becoming a victim in this process. The unexpected interest rate hike by the Bank of Japan, coupled with market expectations for a rate cut by the Federal Reserve, has increased uncertainty around central bank policies, leading to deleveraging in the financial system. According to some traders, this is the main reason for the drop in Bitcoin prices.