Bitcoin Drops As Yen Falls, Canada Approves Stablecoin Rules:...
Japan’s stimulus package has shaken global markets, including Bitcoin, while the UK cracks down on Russian money laundering and sanctions evasion with crypto.
On Friday, the Japanese government approved a $135-billion (21.3 trillion Japanese yen) stimulus package, mainly aimed at price relief and subsidizing gas and household electricity bills.
Prime Minister Sanae Takaichi and her cabinet believe the plan will dampen inflation by 0.7 percentage points on average from February to April. But markets, including crypto markets, are concerned.
The yen has significantly weakened against the US dollar, hitting 10-month lows; Japanese government 10-year bond yields reached 1.84% on Thursday, the highest level since the 2008 financial crisis. Major government spending like this stimulus package is likely to lead to the issuance of more bonds, further weakening the yen, which would prompt the Bank of Japan to intervene with rate hikes. That could trigger mass sell-offs in the US.
It could happen soon. Finance Minister Satsuki Katayama said on Friday, “We are alarmed by recent one-sided, sharp moves in the currency market.” In tandem, Bank of Japan governor Kazuo Ueda said that the bank will discuss the “feasibility and timing” of a rate hike in subsequent meetings.
Bitcoin (BTC) has continued to slump amid this news. Historically, a weakened yen has served as a profitable haven for Bitcoin traders. They could borrow yen at low-interest rates, convert it into US dollars and invest in high-yield assets. However, Japan’s record debt levels and a potential rate hike have prompted traders to reconsider the yen’s stability.
It hasn’t all been doom and gloom for Bitcoin this week. Market hopes rose on Thursday when Bitcoin-themed bar PubKey opened its doors in Washington, DC for the first time.
A surprise appearance by pro-crypto Treasury Secretary Scott Bessent made the rounds on X. Some viewed it as a bullish sign: “Having the Secretary of the Treasury at the Pubkey DC launch seems like a moment I could easily look back on and say ‘wow, it was all so obvious’,” treasury company Strive’s Ben Werkman said in an X post.
PubKey first launched in New York City in late 2022. The concept is simple: Combine a local watering hole with a love for crypto. It’s seen notable success, particularly after US President Donald Trump made an appearance during his 2024 campaign run. He ordered 50 burgers and 50 Diet Cokes — and paid for them with Bitcoin on the Lightning Network.
Source: CoinTelegraph
