Bank of Japan (BOJ) and the 500 Billion Disinvestment using ETFs - Cryptocurrencies? Gold?

[Igor Pereira]

There is a colossal movement forming behind the scenes of the global economy that most retail investors are ignoring. While headlines focus on daily noise, the Bank of Japan (BOJ) is about to start an operation that can drain liquidity from global markets.

By Igor Pereira Financial Market Analyst & Junior Member WallStreet NYSE

We're not talking about anything in five or ten years. The trigger will be pressed as soon as next month.

As an analyst, it is my duty to translate what this means into your portfolio — be it stock, gold or cryptocurrency.

For years, Bank of Japan has acted as a voracious buyer in the stock market, using ETFs (index funds) to artificially sustain the economy and asset prices. They didn't buy much. They bought it. very.

Today, BOJ is sitting on a mountain of ¥83 trillion in shares. That's about equal to $534 billion.

Now, we come to the uncomfortable part: The exit phase. For the first time in decades, BOJ plans to start selling those positions back on the market.

This creates a constant source of offer (sale) on the market. Month after month, there will be a giant salesman dumping papers, regardless of the investor's feelings. And remember, we're not talking about a hedge fund that might change its mind. We're talking about a central bank.

Many traders ask me: "Igor, why should I worry about Japan if I operate S&P500 or Bitcoin?"

The answer lies in liquidity and capital flow. Japan is one of the world's largest creditors. Japanese institutions have massive amounts of foreign assets, including US shares and treasury bonds.

When one of the largest Central Banks in the world starts to withdraw stimuli and sell assets (reducing its balance sheet), global liquidity dries out.

1. Capital Repatriation: If volatility increases or yields in Japan rise, Japanese capital tends to leave the US and Europe and return home.

2. Risk Aversion: The market hates uncertainty. The simple presence of this massive salesman leaves the great defensive institutional players.

Impact on Cryptocurrency and Risk Assets

You can expect the cryptocurrency market to feel the blow in the short term. Cryptos and technology actions (Growth) are highly sensitive to global liquidity. When the easy money toll begins to close in Japan, the correlation between stocks and crypt tends to increase, pulling both down in times of stress.

This is not necessarily a crash Instant tomorrow, but of a structural and silent selling pressure. It's like swimming against the current: the high rallies become harder to sustain and the falls, more pronounced.

I was one of the few to warn about the last corrections days before they happened, and the technical signals (Wyckoff) are starting to show institutional distribution.

I'm finalizing a detailed analysis of which actions and sectors are most exposed to this BOJ movement.

If you are positioned in Actions, XAU/USD or Crypto, you need to know where the risks are.