At 3 a.m., a trader exchanged his last Bitcoin profit for USDD stablecoin. At that moment, the crypto community was being flooded with a major news story: the Bank of Japan announced a rate hike, pushing the policy rate to a multi-decade high. He realized that a twenty-year global financial cycle was now entering its countdown.

On Wall Street's trading screens, two reports were confronting each other. One was the US CPI report, with obvious data gaps, leading the market to imagine that the Federal Reserve still had room to cut rates; the other was from Tokyo, where the Bank of Japan's rate hike decision directly targeted the lifeblood of the global financial system.

What seemed like a routine monetary policy adjustment was actually a knife pointing at the global capital markets — those yen arbitrage trades exceeding $8.6 trillion were facing an unprecedented shock.

**The End of the Cheap Financing Era**

Over the past twenty years, global hedge funds and investment banks have been reveling in an almost risk-free financial game. The strategy was simple: borrow yen at near-zero interest rates, exchange it for dollars, and then deploy the funds into high-yield assets worldwide — US stocks, US bonds, cryptocurrencies, emerging markets… These cheap yen formed an invisible support for the prices of risk assets globally.

Fund managers profited from the exchange rate differences while the crypto market absorbed endless cheap capital unconsciously. But Tokyo’s rate hike chime changed everything.

The logical chain became cold and brutal: the cost of borrowing yen was no longer negligible, exchange rate expectations reversed, and the pressure for yen appreciation intensified. When financing interest rates shifted from "near-zero" to "actual costs," high-yield investments based on arbitrage immediately lost their appeal.

For cryptocurrencies like Bitcoin and USDD, the drying up of cheap funds meant a shift in driving forces — from passively accepting liquidity to relying on fundamental factors and market expectations. The market will face re-pricing, and those who can adapt to the new environment will seize the opportunities of the next cycle.