Journalist
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This cycle, Japan is emerging as a solid benchmark for digital assets.
On a macro level, between the BOJ’s recent rate hike, the record high in government bond yields and the JPY losing 6% this quarter, Japan’s economic situation has served as a useful reference point for US investors.
That said, the latest CPI report has calmed some concerns. For context, Tokyo’s CPI in December came in at 2%, below the expected 2.7% and lower than the 3% previously, indicating a clear slowdown in inflation.
Source: TradingEconomics
Naturally, this development looks bullish for the crypto market.
From a technical perspective, the slowdown could prompt the BOJ to keep rates unchanged for the foreseeable future meeting at the end of January or even consider an interest rate cut to inject additional liquidity into the system.
However, the question remains: will this be enough to attract investors to digital assets, especially Bitcoin [BTC]? Given the way 2025 has been shaping up for US investors, the likelihood seems increasingly remote.
Japan’s CPI Declines, Gold Shines: Is Bitcoin on the Sidelines?
2025 was one one-way street for investors.
Gold is up +72% this year, increasing its market cap by $13.2 trillion. Silver is up +155% year-to-date and is now the third largest asset in the world. Meanwhile, platinum is up +159%, on track for its biggest annual percentage gain ever.
Essentially, even with three consecutive Fed rate cuts in the second half of 2025, investors continued to pile into metals over digital assets. That suggests Japan’s falling CPI may not cause the same move for crypto this time around.
Source: TradingView (Gold/USD)
However, at the macro level it is not just about liquidity.
Instead, it signals a declining “risk appetite” among American investors. Normally, its macro stability would have increased that of Bitcoin Coinbase Premium Index (CPI) is back in the green, but is currently at its lowest point in a month.
In this situation, it could be risky to bet bullishly based solely on macro data.
According to AMBCrypto, this points to a clear difference in market fundamentals. Even though Japan’s CPI looks solid, it may not lead to a rally as Bitcoin’s hedge story appears to be losing momentum.
Final thoughts
- Despite a slowdown in inflation and potential liquidity support from the BOJ, Bitcoin could struggle to attract capital.
- Strong demand for gold, silver and platinum highlights declining risk appetite, making bullish bets on Bitcoin risky.