The Bitcoin-Japanese Yen (BTC/JPY) couple faced a setback at the most important trend line resistance on Wednesday when Goldman Sachs (GS) cited the anti-risk yen as the leading hedge against rising US customs and recession risks.
The BTC/JPY trading on the Japan-based bitflyer fell 1% after not taking the trend line pulled out of the record reached on January 20, data from the Charting Platform TradingView Show.
BTC’s USD-denomined award was facing similar losses. Meanwhile, Asian equity index and US equity futures water in front of President Donald Trump’s sweeping new “Liberation Day” drew mutual tariffs on Wednesday that could trigger a global trade war.
Tariff has spurred several investment banks, including JPMorgan and Goldman Sachs, pencil in a greater chance of American recession or consecutive quarter -wise contractions in the growth rate.
Some crypto observers expect investors to treat Bitcoin (BTC) as a garden active if a customs financial swoon is realized. Goldman, however, sees the Japanese yen, a long -free safe harbor as the top hedge against American risks.
“Yen offers investors the best currency hedge if the chances of a US recession increase,” said Kamakshya Trivedi, head of global currency, interest and emerging market strategy at Goldman Sachs, late Tuesday, according to Bloomberg.
Trivedi added that yen is also a “very good hedge” against the weakness of the American labor market and tends to do best when the right prices [inflation-adjusted yields] and US stocks collapse.
While BTC is largely seen as a digital gold or garden active by Crypto Market participants, cryptocurrency has historically moved in tandem with technology warehouse. In other words, customs-led risk-off on Wall Street could throw over to the crypto market.
In addition, Yen’s strength could result in the settlement of risk-on bullish trades funded by cheap yen-denomined loans, contributing to the overall risk aversion in the financial markets. The Crypto market experienced this at the beginning of August last year when the yen carries trade revealed, which led to a fall in both shares and BTC. During this period, Bitcoin fell from approx. $ 65,000 to $ 50,000 within a week.
Goldman expects the Japanese yen to rise to the low 140s against the US dollar this year. The USD/JPY couple traded with 149.77 at the time of the press. The exchange rate is known for tracking the difference between the yields of the 10-year-old US and Japanese bonds.
The latter recently fell to its lowest since August 2022 and offers Yen-Bullish signals.
