The Cryptocurrency Market Could Collapse Again Like in Q1 2026

The cryptocurrency market could crash again as it did once more in Q1 2026. And this will happen due to the Japanese bond market crisis. This week, the yields on Japan’s 2-year, 3-year, and 5-year bonds have reached new all-time highs. In addition, Japan’s 10-year bond yield has also surged to its highest level since 1999. Why is this happening? Bond yields rise when inflation expectations increase. Due to the U.S.-Iran war, very few ships are passing through the Strait of Hormuz. Nearly 90%-95% of Japan’s oil goes through this route, which is nearly blockaded. This makes investors worry that inflation will surge, leading the Bank of Japan (BOJ) to adopt tighter monetary policy. And if the BOJ tightens policy, they will raise interest rates. This is what has happened every time the BOJ has raised rates. March 2024: BTC hit a peak of $74,000 and quickly fell 20%. July 2024: BTC dropped sharply by 30% in just one week. January 2025: BTC hit a peak and fell 35% over the following few months. December 2025: BTC fell 34% in just 1.5 months. And this happens for a single reason. Every time the Bank of Japan (BOJ) raises interest rates, borrowers with cheap yen rates suddenly have to pay more. This forces them to sell assets such as stocks and cryptocurrencies to convert into yen. This makes the yen stronger still and causes an even sharper decline, leading to a chain-reaction of liquidations. Right now, there is a 55% chance the BOJ will raise interest rates by 25 basis points this month. If the U.S.-Iran situation is not resolved, the probability of a rate increase will rise, which could repeat the history of a crash.