A Year Ago Today, Bitcoin Hit $49K on Yen Carry Trade Unwind, Now It’s Up 130%

One year ago, a significant market shift occurred due to the unwinding of the yen carry trade. Japan’s tighter monetary policy and rising bond yields diminished the appeal of this strategy, leading to a rapid capital flight from risk assets. Bitcoin (BTC) experienced a sharp decline, plummeting nearly 30% to $49,000, a level last seen during the January 2024 U.S. spot ETF debuts.

However, the subsequent year showcased remarkable recovery. Bitcoin rallied over 130%, demonstrating resilience. Traditional markets also performed strongly, with the S&P 500 rising 24% and gold appreciating 40%, indicating investor demand across both risk and defensive assets. Conversely, the dollar index (DXY) weakened, falling from 103 to just under 100, reflecting rising long-term bond yields.

The U.S. 10-year Treasury yield increased from 3.7% to 4.2%, while the 30-year yield rose to 4.8% from 4.0%. International interest rates also contributed to these shifts. The U.K.’s 30-year yield climbed to 5.3% from 4.3%, and Japan’s surged above 3% from 1.9%.

Despite the price volatility, long-term bitcoin holders have consistently increased their holdings. Glassnode’s HODL Waves chart illustrates this trend, showing the distribution of bitcoin by holding duration. The 7-to-10-year cohort’s share increased from 4% to over 8%, highlighting long-term confidence and accumulation. Simultaneously, the 6-to-12-month holder segment grew from 8% to 15%, suggesting new investors entered during the rally.

Interestingly, sub-3-month holders now represent a larger percentage of the supply than in 2024. This indicates that many buyers likely entered at higher price points, possibly chasing recent highs rather than strategically accumulating at lower prices. This observation highlights the dynamic interplay between long-term conviction and short-term market behavior within the cryptocurrency space. The data suggests a blend of seasoned investors and newer participants shaping the current market landscape.