The market is buzzing with significant news – the probability of the Bank of Japan raising interest rates in December has soared to 81%! This is no small matter, considering that Japan is one of the few economies in the world that has maintained a negative interest rate policy for a long time. This policy shift could trigger a chain reaction of global capital flows.

First, let's talk about why this matter is worth paying attention to. In the past few years, yen arbitrage trading has been a favorite among institutions—borrowing yen at ultra-low or even negative costs and then investing in US stocks, bonds, and crypto assets, making easy profits just from the exchange rate and yield difference. However, once Japan really raises interest rates, the rules of the game will change: borrowing costs will skyrocket, and those trillions of arbitrage funds will inevitably have to consider closing positions and flowing back, at which point the yen will strengthen, and global market liquidity will tighten.

What does this mean for risk assets? The USD/JPY may come under pressure, US Treasury yields could rise, and US stocks, especially tech stocks, may not perform well in the short term. The cryptocurrency market is extremely sensitive to liquidity; once funds are tightened, short-term volatility is likely inevitable. Major cryptocurrencies like Bitcoin and Ethereum may face adjustment pressure.

However, on the other hand, things are not so pessimistic from a long-term perspective. The normalization of monetary policy in major economies may instead highlight the unique advantages of cryptocurrencies such as Bitcoin as "non-sovereign currencies" and "stores of value alternatives." Historically, every macro tightening cycle has been a time for the market to be reshuffled.

How to respond strategically? In the short term, 1 to 3 months, it is recommended to lower return expectations, control positions and leverage, and allocate more stablecoins or cash to maintain flexibility. In the long term, this wave of macro tightening is more like a stress test. If the market does experience a deep correction due to panic from interest rate hikes, it may actually be a good window for those optimistic about cryptocurrencies to lay out their mid- to long-term positions.

In summary: be cautiously observant in the short term, and keep an eye on retracement opportunities in the long term. The market never lacks volatility; what is lacking is the ability to remain clear-headed amid the fluctuations.