Bitcoin ditches $16K dip as 'Leroy Jenkins' Bank of Japan flattens dollar
Bitcoin (BTC) recovered from an overnight dip on Dec. 20 as Japan’s central bank sparked chaos on global financial markets.
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD returning to near $17,000 after falling over 3% through the course of Dec. 19.
The largest cryptocurrency benefitted from flash U.S. dollar weakness, this coming on the back of a surprise policy tweak from the Bank of Japan (BoJ).
Long a deflationary environment with ultra-low interest rates, Japan woke up to a sea change on the day as policymakers lifted the cap on bond yields. The yen instantly gained against the dollar, while Japan’s Nikkei plummeted.
Reacting, Bitcoin analysts were anything but jubilant despite the short-term benefits for BTC/USD.
Japan, seeming to follow the U.S. in attempting to tame inflation, had unleashed a can of worms which would only become apparent later, they said.
“That’s what happens when you artificially surprises the free market,” Arthur Hayes, former CEO of exchange BitMEX, tweeted, likely intending to write “suppress” instead of “surprises.”
Hayes had previously written about central banks’ practice of yield curve control (YCC), which at the time he said was irreversible once started.
A further post meanwhile focused on BoJ ownership of Japanese bonds, now above 50%. This scenario, he said, was reminiscent of the last days of defunct exchange FTX.
“It’s like the BOJ is taking lessons from (FTX ex-CEO, Sam Bankman-Fried,” Hayes wrote.
Other responses were no less frank in their appraisal of the BoJ, with Marty Bent, founder of crypto media company TFTC, likening the move to it having “pulled Leroy Jenkins on the global financial system.”
“A minor policy tweak has huge implications that will take weeks to
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