Bitcoin in Decline: The Downturn Linked to Japanese Government Bonds

After a brief consolidation period and a bullish rise toward $93,000 at the end of last week, Bitcoin has declined again toward the $85,000 mark, recording a significant 7% drop on Monday (CoinGecko data). Market expert Shanaka Anslem attributes this latest crash to what he refers to as the “weapon” behind it: Japanese Government Bonds.

Key Takeaways

Bitcoin's price has fallen to around $85,000, down 7% in one day.
Rising yields on Japanese Government Bonds are causing significant market shifts.
The trend affects leveraged positions in the Yen Carry Trade.
A notable correlation between Bitcoin and major stock indices has emerged.
Experts predict Bitcoin could fall to $75,000 if Japanese interest rates rise.

The Warning on the Unwinding of the “Yen Carry Trade”

In a recent post on platform X, Shanaka Anslem highlighted a crucial data point: The yield on 10-year Japanese Government Bonds reached 1.877% on December 1, 2025 — its highest level since June 2008. Simultaneously, the 2-year yield hit 1%, a benchmark not seen since before the Lehman Brothers collapse.

Anslem explains that these rising yields have triggered a significant unwinding of what he describes as the largest arbitrage trade in history: the Yen Carry Trade. Estimates suggest this trade's total size ranges from $3.4 trillion to $20 trillion, allowing global investors to borrow Japanese yen at minimal costs to purchase various assets, including stocks, U.S. Treasuries, and cryptocurrencies like Bitcoin.

The Chain Reaction: Margin Calls and Liquidations

The mechanics at play are straightforward but have significant implications. As yields rise, the yen strengthens, making leveraged positions less profitable or even resulting in losses. This creates a chain reaction:

Sales trigger Margin Calls (requests for additional collateral).
Failing to cover margins leads to further forced liquidations.

The data paints a clear picture: on October 10, a record $19 billion in crypto positions were liquidated. In November, Bitcoin ETFs experienced outflows of $3.45 billion, with BlackRock's IBIT suffering a $2.34 billion loss. On December 1 alone, another $646 million was liquidated by lunchtime.

Will Bitcoin Plummet to $75,000?

This decline coincided with an increase in Bitcoin's correlations with major stock indices, showing a 46% correlation with the Nasdaq and 42% with the S&P 500.

In his analysis, Anslem notes that what was once seen as an “uncorrelated hedge” has now become a levered indicator of global liquidity conditions. Interestingly, despite the price drop, Whales (large investors) have accumulated 375,000 BTC during this period. Additionally, miners have considerably reduced their sales, dropping from an average of 23,000 BTC monthly to just 3,672 BTC.

Looking ahead, the expert indicates that a pivotal moment approaches: December 18, when the Bank of Japan (BOJ) is expected to announce its monetary policy decisions. Anslem's conclusion is clear: if the central bank opts to raise rates and signal further increases, Bitcoin's price could test the $75,000 level, marking an additional 11% decline from current trading levels.