Bitcoin dropped more than 2% in a matter of hours Monday as the US and Japan launched a rare joint intervention to buy the Japanese yen — the first such coordinated action since 1998. The move, which saw Treasury Secretary Scott Bessent pledge further yen support alongside Tokyo, sent a shock through risk assets, with crypto traders pointing to fears of a looming carry trade unwind as the primary culprit.
The yen intervention and crypto's reaction
The joint operation began early in the Asian session, with the Bank of Japan and the US Treasury buying yen in an effort to stem the currency's slide. Bitcoin, which had been trading in a narrow range, quickly reversed course, shedding more than 2% within a few hours. The decline was broad-based, with other major cryptocurrencies also losing ground.
Why a carry trade unwind spooks Bitcoin
The drop is being attributed to concerns that the intervention could trigger a rapid unwinding of yen carry trades — a strategy where investors borrow cheap yen to buy higher-yielding assets like Bitcoin. If the yen strengthens sharply, those trades become unprofitable and are closed in a hurry, often selling off the funded assets. "Fears of a carry trade unwind" were cited as the key driver, according to market participants.
Bessent's pledge
Treasury Secretary Scott Bessent said the US is prepared to intervene further alongside Japan if needed, signaling that the coordinated effort is not a one-off. The statement added to the sense of urgency in currency markets, which in turn spilled over into crypto. Bessent's comments marked the first time a US Treasury chief has publicly committed to joint yen intervention in decades.
The intervention is ongoing, and traders are watching for any signs of further coordinated action. The yen's direction in the coming days will likely determine whether Bitcoin can recover or if the sell-off deepens. For now, the crypto market is digesting the reality that a major central bank is actively buying its own currency — and that has consequences for every risk asset in its path.
