This Week in Bitcoin 84: Carry Trade Crack
Dec 3, 2025
A major market ripple unfolds as the yen carry trade unravels, impacting Bitcoin's trajectory. The host dives into why Bitcoin thrived during Fed tightening, highlighting liquidity as a key player. Vanguard's surprising pivot to crypto ETFs sparks market enthusiasm, while institutional giants like Bank of America embrace crypto access. The discussion touches on ongoing concerns about a potential bear market and how to hedge effectively. Plus, amusing takes on Bitcoin's origin remind listeners of its wild journey in the financial landscape.
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Liquidity, Not Just Rates, Drove Bitcoin
- Bitcoin reached new highs despite Fed tightening because liquidity sources differed from typical cycles.
- Chris Las argues Treasury and other liquidity drivers overcame quantitative tightening to push price higher.
Yen Carry Trade Fueled Global Liquidity
- The yen carry trade relied on near-zero Japanese rates creating vast cheap funding globally.
- A BOJ shift toward higher rates threatens that trade and global liquidity flows according to Chris Las.
BOJ's No‑Good Policy Dilemma
- The Bank of Japan faces a painful choice: raise rates and crash the carry trade or ease and risk inflation and currency damage.
- Either path forces asset sales, higher yields, and global market stress, Chris Las warns.