Bitcoin Under Pressure Amid Yen Carry Trade Unwind
Recent market actions reflect significant stress stemming from the unwinding of the yen carry trade, a phenomenon that has long operated beneath the surface but is now gaining attention due to heightened volatility across global markets. Graham Stephan, a notable financial content creator, articulated the implications of this development in a post dated December 15.
Understanding the Yen Carry Trade
The yen carry trade has served as a pivotal mechanism supporting global liquidity for decades. Basic instructions on its operation highlight that investors borrow in Japanese yen, where interest rates remain near zero, and then invest in higher-yielding U.S. assets, profiting from the difference between the borrowing costs and returns.
As Stephan pointed out, this trade, which utilized what could be described as
