Bitcoin (BTC) rallied 5% during US trading hours, reaching $81,000. 

Key points: 

• Bitcoin rallies above $81,000 in US trading, having risen more than 5% over the past 24 hours.
• USD/JPY drops to 155.4 amid suspected Bank of Japan (BOJ) intervention, dragging the US Dollar Index (DXY) down to 99.
• Polymarket odds for a BOJ rate hold collapse further from 12% to 1%, with a 98% probability now priced in for a 25-basis-point hike on Sept. 18.

Weaker dollar drags crypto higher

At the time of writing, BTC stands at $81,000, near the highs seen during last month’s surprise upside. 

The move comes as the Japanese yen (JPY) continued to strengthen in a suspected central bank intervention, which Cointelegraph first reported on Wednesday. After dropping to 158.5 on Wednesday, the USD/JPY pair saw further downside to 155.4. This put pressure on the DXY, which fell to 99. Downside in the DXY has historically been positive for Bitcoin. 

US Dollar Index 1-day chart. Source: TradingView

Shares of Michael Saylor’s Strategy (MSTR) participated in the rally and rose 8.6% on Wednesday. The stock is up 70% from its lows in late June, but still down roughly 10% year-to-date. Strategy’s perpetual preferred stock STRC, which had been frequently compared to a money market fund, is still trading below its par value of $100 and remains stuck at $97.80 at the time of writing. 

Related: Strategy turns 1,690 BTC into $108.6M STRC buyback

Analysts divided on impact of yen intervention

The latest suspected intervention to support the yen, coupled with the prospect of a Bank of Japan rate hike later this month, has also revived fears of another carry-trade unwind.

“In the last 24 hours, USD/JPY has dropped almost 2.5%, which doesn’t happen without any major intervention,” The Macro Paper commented on X. “On top of that, BOJ is most likely expected to hike rates this month, with more rate hikes possible in Q4. This is the exact thing that happened in Q3 2024, when BOJ intervened and hiked rates together.”

The Polymarket probabilities for a BOJ rate hold dropped from 12% to 1% Wednesday, cementing the prospect of a rate hike. The current market-implied probability of a 25-basis-point hike at the BOJ’s Sept. 18 meeting is 98%.

Polymarket probabilities for BOJ rate decision on Sept 18. Source: Polymarket

Some have also seen the currency intervention as liquidity-positive. Arthur Hayes, CIO of Maelstrom, has long held that the Foreign and International Monetary Authorities’ (FIMA) repo facility will provide Japan with dollar liquidity against Treasury collateral, easing global liquidity conditions. While no funds appear to have been drawn from this facility so far, Treasury Secretary Scott Bessent raised the prospect in late July.