Crypto prices today (Dec. 19): BTC, SOL, XMR, WLFI at crossroads as BoJ raises rates by 25 bps

Crypto prices today traded in a narrow range as traders paused to digest a key policy shift out of Japan.

The total crypto market capitalization rose 0.4% to $3.02 trillion, but price action across major tokens stayed tight. Bitcoin was trading at $86,724 at press time, up 0.3% over the past 24 hours. Most large-cap assets posted small moves rather than clear direction.

Solana added 0.1% to $122. Monero slipped 1.1% to $421. World Liberty Financial stood out, rising 3% to $0.1295.

Risk appetite remained weak. The Crypto Fear & Greed Index fell one point to 16, keeping sentiment deep in extreme fear. Liquidations over the last 24 hours totaled $512 million, a 0.7% decrease from the day before, according to CoinGlass data. The average market relative strength index is close to 40, indicating neutral momentum, while open interest increased 1.47% to $125 billion.

BoJ rate hike tightens global liquidity

The muted trading followed a decision by the Bank of Japan to raise its benchmark interest rate by 25 basis points to 0.75%. The move pushed Japanese rates to their highest level since 1995.

Unlike recent rate cuts in the U.S. and U.K., Japan’s shift works in the opposite direction for global liquidity. Higher rates strengthen the yen and reduce the appeal of the yen carry trade, a long-standing source of funding for risk assets.

Prior BoJ increases in 2024 and early 2025 were accompanied by sharp declines in Bitcoin as liquidity tightened.. Although the current increase was widely expected, traders are still concerned about how far Japan might go if inflation continues to rise. 

Initial reactions were mixed. Bitcoin briefly pushed above $87,000 after the decision before settling back, suggesting the hike was largely priced in. With markets assigning a near-certain probability ahead of time, attention has shifted to future guidance from Governor Kazuo Ueda.

Analysts say a hawkish tone could reopen downside risk, especially if further hikes are signaled. A softer stance, by contrast, may limit damage and allow markets to stabilize. 

Recovery paths and longer-term offsets

While tighter Japanese policy tends to pressure risk assets at first, past cycles suggest the effect can fade once the unwind runs its course. Crypto has often stabilized after early selling, especially when liquidity conditions elsewhere improve or central banks step in to calm markets.

Japan’s recent tax change could also soften the blow. The country cut crypto taxes from as high as 55% to 20%, a move that may encourage domestic capital to stay onshore or rotate into digital assets as carry trades become less attractive.

At the same time, Japan’s shift signals a bigger change. As the BoJ normalizes policy, its role as the world’s cheapest funding source is shrinking. That could push crypto markets to lean more on other drivers, such as U.S. policy easing, exchange-traded fund demand, and institutional adoption.