Recently, there is a signal worth following: the Bank of Japan may raise the policy interest rate to 1.0% in June-July of this year. Once the BoJ approaches a neutral interest rate near 1.75%, the pace of subsequent interest rate hikes is expected to slow down. This may seem like a small piece of news, but its impact on global asset allocation could be beyond imagination.

Many people are focused on the daily charts of BTC and ETH, but they overlook the invisible hand behind it. The Intrerest Rate determines the flow of global hot money. When major economies like the US and Japan simultaneously enter an interest rate hike cycle, funds that were originally hot in emerging asset classes will instinctively flow back to traditional financial markets in search of a safety margin. This puts real pressure on both the crypto market and the stock market.

Historically, when a wave of interest rate hikes begins, it often signifies a process of reallocating existing funds. Market participants have long been digesting this expectation, and some institutional investors and large players have already started adjusting their positions. If you are still fully invested now, you need to think carefully about your risk tolerance—during an interest rate hike cycle, drawdowns are not a matter of probability; they are a highly probable event.

Although mainstream cryptocurrencies like BNB, ETH, and BTC have relatively robust fundamentals, they are inevitably affected by the tightening of macro liquidity. The wisest approach is neither to go all in nor to completely exit, but to dynamically adjust your portfolio structure based on the interest rate hike rhythm.