Don't think that a bull market can sleep peacefully. Interest rates in Japan are quietly climbing, which is like a knife hanging over the head for risk assets.

Starting on Monday, Japan's 10-year government bond yields suddenly gained strength, directly breaking through a 17-year all-time high. What's even more outrageous is that it is still going up on Thursday, and it has now set a new 18-year record. Although the Bank of Japan did not call for interest rate hikes, the effect of raising real interest rates is no different from raising interest rates.

Why care about this? Because the yen has always been the world's largest source of "cheap money". In the past ten years, countless people have used this logic to make money: borrowing low-interest yen, buying US bonds, US stocks, credit bonds, and even BTC and ETH - all of which are beneficiaries of this food chain. Now that financing costs are rising, but the yields of these assets have not risen much, the spread is naturally flattened. Leverage began to become unpleasant, new funds were reluctant to enter the market, and the old leverage was under great pressure when renewing the contract, and as interest rates continued to rise, the wave of liquidation could come at any time.

To put it more bluntly: in the past, someone lent you money for free and asked you to buy U.S. bonds with an annualized return of 4%, and you earned as much as you wanted. Later, he said that he would charge 1% interest, and although you were unhappy, you could still earn 3%. The problem is that the interest will slowly rise - when it rises to more than 3%, although you haven't lost money yet, you are already panicking, because if it rises to 4% or even higher, won't you do it in vain? So smart people will sell their assets in advance to pay back the money and leave. No one would be stupid enough to earn more than 4% interest to earn 4% income.

This is the current situation of Japan's interest rates, and it is also the sword hanging over the crypto market.