The probability of a rate hike by the Bank of Japan in December has already soared above 80%. This might sound like it's far removed from us, but in reality, it could be the biggest liquidity landmine to watch out for this year.

For decades, the yen has been the global capital market's "free leverage"—borrow yen to buy US stocks, crypto, and all kinds of high-yield assets. This strategy has supported a trillion-dollar carry trade. Now that Japan is about to raise rates, it means the cost of this game suddenly spikes, and a large amount of capital will be forced to exit risk assets.

You know how sensitive the crypto market is to liquidity. Once carry trades start to unwind, the selling pressure will be very direct. What's even trickier is the sentiment factor—when the world's "most dovish" central bank begins to tighten, market risk appetite cools rapidly. Low liquidity combined with high volatility can easily trigger a cascade of liquidations.

So what should you do at this point? A few suggestions:

Reduce your contract leverage to the minimum, or simply switch back to spot. Hold more stablecoins on hand and wait to step in when the market is truly panic-selling. Keep a close eye on the market in the 48 hours around the December policy meeting.

Look back at the rate hike cycle in 2018, or when Japan adjusted its yield curve control policy in 2022—every time there's a major liquidity retreat, the short-term pain is severe, but it often creates key medium- to long-term buying opportunities.

When the tide goes out, you see who's swimming naked. This round may hurt, but it could also be a chance to reposition in core assets like BTC and ETH. The key is, are you holding bubbles right now, or real gold and silver?