Bitcoin Slumps as Yen Weakens; Canada OKs Stablecoin Rules
Bitcoin fell sharply after Japan approved a ¥21.3 trillion stimulus package that sent the yen to 10-month lows and raised expectations of a Bank of Japan rate hike. The yen’s 3 percent drop since the new prime minister’s election has undermined its appeal as a funding currency for carry trades, prompting Bitcoin sellers to lock in gains. In Canada, parliament approved a 2025 budget that includes stablecoin regulation under Bank of Canada oversight, mandating issuers to hold full reserves, set clear redemption policies and register with authorities. Meanwhile, the UK’s National Crime Agency exposed a crypto‐enabled money-laundering network linked to Keremet Bank in Kyrgyzstan, seizing £33 million in illicit funds. Traders should watch for increased volatility in BTC as macro shifts in currency markets, evolving stablecoin rules and global enforcement actions reshape short-term flows and long-term risk profiles.
Bearish
The combined impact of a weakened yen, looming BOJ rate hikes and Japan’s massive stimulus has eroded carry-trade strategies that historically supported Bitcoin funding flows, triggering a sell-off. Canada’s clear stablecoin framework offers long-term benefits but does little to offset immediate downward pressure on BTC. At the same time, the UK NCA’s crypto laundering crackdown raises compliance concerns and short-term market jitters. Similar currency shocks in 2022 and regulatory enforcement waves have correlated with Bitcoin pullbacks, suggesting continued bearish sentiment in the near term even as these developments could stabilize digital assets over time.