No country has been spared from the economic stress caused by ongoing geopolitical crises.
According to The Kobeissi letterAsian markets are now entering a structurally driven energy shock. For crypto investors, the implications extend beyond short-term volatility. Instead, what matters is how these macro shifts play out “over time,” determining whether the current dip develops into a broader opportunity.
Remarkably, Japan serves as an important case study. Because roughly 90% of energy is imported, rising oil prices have a direct impact on inflation. As a result, these pressures are now manifesting in bond markets, with Japanese 10-year government bond yields rising to 2.30%, close to levels last reached in 1999.
So the question naturally becomes: how do crypto investors position themselves in this?
From a technical lens, USD/JPY is approaching the 160 leveldue to the continued weakness of the yen against the US dollar. Historically, this level has acted as a trigger point for intervention. The mechanism is crucial: to support the yen, Japanese authorities intervene by selling US government bonds to buy their domestic currency.
Why does this matter? Japan is the largest foreign holder of US government bondswith approximately $1.1 trillion in assets. If Japan starts selling, it means money is moving out of US assets and back into the yen. That shift reduces demand for the dollar, putting downward pressure on it.
Historically, a weaker dollar has supported liquidity and driven capital into cryptocurrencies. So the question is: With the crypto market still capped amid ongoing geopolitical uncertainty, could this weakening dollar setup create a longer-term bullish opportunity?
Fears of a recession are forcing investors to reconsider cryptocurrency exposure
The focus is not on oil. Instead, the real action is in the US bond market.
For context, the latest FOMC meeting held interest rates steady, indicating that rate cuts are unlikely in the near term. That move pushed the US Dollar Index (DXY) above 100 and sent the Interest on 10-year government bonds up almost 4%, back to levels last seen in July 2025.
Crypto markets reacted immediately, dropping 5.5% this week, underscoring the well-known inverse relationship with the dollar. Yet, smart money doesn’t seem to worry on an ongoing trend, viewing this as a short-term shock rather than a structural shift.
For example, Goldman Sachs has raised the probability of a US recession to 30%, an increase of 5 percentage points from previous estimates. The driving forces include rising oil prices, tighter financial conditions and ongoing tensions in the Middle East.
The implications are clearSlower GDP growth (1.25%-1.75% in the second half) and rising unemployment (4.6%) are putting pressure on the economy, while the door remains open for interest rate cuts later this year. Notably, Japan is already showing similar tensions, reflecting how these pressures are playing out in Asian markets.
Taken together, these shifts could divert global capital flows, weigh on the US dollar over time and create potential opportunities for crypto. This suggests that much of the current volatility in risky assets is likely a short-term reaction rather than a long-term trend.
Final summary
- Rising rates, interventions in the yen and weaker conditions in the US dollar could create long-term opportunities for crypto.
- The recent FOMC caused a decline in crypto, but Smart Money sees this as a temporary shock rather than a lasting trend.