ELI5:
“They” say one of the primary contributing factors to this Bitcoin and equity selloff is the unwinding of the yen carry trade, that is to say, the differential between USD and JPY rates just narrowed due to an increase of the JPY rate, and people are selling risk assets to pay back their yen loans. Fair enough.
If that’s true though, wouldn’t the lowering of USD rates also cause a narrower spread? Yet lowering the USD rates is widely seen as positive for risk assets. The topic of the “carry trade” never seems to come up in the context of lowering US rates. Why is that?
#asknostr #bitcoin LynAlden (npub1a2c…w83a) #macroeconomics
Anon
npub1k4…6nqqz
2024-08-05 19:55:33
Author Public Key
npub1k4pyerktwkajsfnee5x4evy6s7g48esh2wa7j2d85ex2ghpu656qf6nqqzPublished at
2024-08-05 19:55:33Event JSON
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"content": "ELI5:\n\n“They” say one of the primary contributing factors to this Bitcoin and equity selloff is the unwinding of the yen carry trade, that is to say, the differential between USD and JPY rates just narrowed due to an increase of the JPY rate, and people are selling risk assets to pay back their yen loans. Fair enough.\n\nIf that’s true though, wouldn’t the lowering of USD rates also cause a narrower spread? Yet lowering the USD rates is widely seen as positive for risk assets. The topic of the “carry trade” never seems to come up in the context of lowering US rates. Why is that? \n\n#asknostr #bitcoin nostr:npub1a2cww4kn9wqte4ry70vyfwqyqvpswksna27rtxd8vty6c74era8sdcw83a #macroeconomics",
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