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See our full XRP forecast here.
Bitcoin Sinks as Yen Carry Trade Unwinds
XRP’s losses coincided with bitcoin (BTC) dropping below $80k for the first time since March 11. US tariffs and slow progress toward the Bitcoin Act weighed on sentiment.
Higher tariffs may drive inflationary pressures, supporting a more hawkish Fed stance. Rising borrowing costs affect demand for risk assets. Notably, the USD/JPY dropped below 145 in early trading on Monday, April 7, raising concerns about a renewed Yen carry trade unwind.
In a carry trade, investors take advantage of Japan’s low interest rates, borrowing Japanese Yen (funding currency) to invest in higher-yielding assets, typically with leverage, to boost returns. A Yen carry trade unwind in 2024 resulted from the BoJ’s policy shift and Yen appreciation. In August 2024, BTC fell 8.85% amid post-BoJ volatility.
As of April 2025, the USD/JPY has tumbled 3.23% to 145.108, its lowest level since the carry trade unwind, with BTC down 6.29%. Trump’s tariff actions have triggered a flight to safety boosting demand for the Yen, and accelerating the market sell-off.
Journalist and CryptoAmerica host Eleanor Terrett commented on Sunday’s sell-off:
“On Friday, Bitcoiners celebrated as the asset they call ‘digital gold’ finally started to act like a safe haven and hedge against extreme volatility, bucking the trend of a tanking equities market. Today, BTC dipped under $80,000 for the first time since mid-March as traders prepare for Monday’s open and what one market analyst told Charles Gasparino of Fox News could be the ultimate pain day.”
BTC Price Outlook: Bearish and Bullish Scenarios
On April 6, BTC dropped 6.14%, following Saturday’s 0.48% loss to close at $78,301.
BTC scenarios include:
- Bearish Scenario: Escalating trade tensions, hotter US inflation, a hawkish Fed stance, extended BTC-spot ETF outflows, or opposition to the Bitcoin Act could drag BTC toward $70,000.
- Bullish Scenario: Softer US inflation data, a dovish Fed, tariff de-escalation, bipartisan crypto support, and sustained ETF inflows could lift BTC toward $109,312.
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