A signal came from Tokyo yesterday, instantly tightening the global financial markets — the Bank of Japan raised the Intrerest Rate to 0.75%, a new high in thirty years. In plain terms, the era of ultra-low interest rates that lasted for thirty years has completely come to an end.

What does this mean? It means that the "perpetual motion machine" of borrowing yen, exchanging for dollars, and earning interest worldwide is going to stop. Hundreds of billions of dollars in arbitrage funds are forced to close positions, financing costs are skyrocketing, and the whole world is looking for money to pay off debts.

Impact on the cryptocurrency space? To put it bluntly, the "liquidity bonus" from the past few years is about to start paying off. The loose environment that every mainstream cryptocurrency in your account has enjoyed is fading. This is not a simple market adjustment, but a systemic reshaping of the liquidity landscape.

What’s even more heartbreaking is that Japan, as the largest holder of U.S. Treasuries in the world, holds about 1.2 trillion U.S. dollars in U.S. Treasury bonds. Once a 5% repatriation is initiated — which means a selling pressure of nearly 60 billion U.S. dollars — the valuations of global risk assets will need to be repriced. U.S. stocks, U.S. Treasuries, and the cryptocurrency market, no one can remain unaffected.

The feast of arbitrage trading is really coming to an end. Strategies that rely on liquidity differentials are seeing their profit margins squeezed tighter and tighter. When Japan's pension and insurance funds begin to "return home," the flow of international capital will undergo drastic restructuring.

In other words, the world's largest "tap" has been tightened, and the chain reaction has only just begun.