Preface

The Japanese government, under Prime Minister Sanae Takaichi, has launched a formidable economic stimulus package valued at $135 billion. This action aims to alleviate the financial strain inflation imposes on households and businesses. While the move garners attention globally for potentially contrasting typical economic perspectives, another significant financial development is the marked decline in Bitcoin prices. As Japan implements this fiscal strategy, Bitcoin has dipped to below $85,500, continuing a downward trend.

Lazy bag

Japan's fiscal strategy involves a multi-billion-dollar stimulus to combat inflation's impact. However, this unfolds as Bitcoin faces a significant drop in value, challenging its role as an inflation hedge.

Main Body

In a bold economic maneuver, Japanese Prime Minister Sanae Takaichi has gained cabinet approval for an extensive fiscal stimulus package totaling 21.3 trillion yen, or approximately $135.40 billion. This initiative represents the most substantial economic intervention since the height of the COVID-19 pandemic. It includes outlays from the general account amounting to 17.7 trillion yen, exceeding last year’s allocation of 13.9 trillion yen. Additionally, the plan incorporates tax cuts valued at 2.7 trillion yen. The imperative behind this financial package is to mitigate the persistent burden of inflation that affects the country's economic landscape. This approach slightly diverges from conventional economic theories that suggest stimulus can perpetuate inflation.

Concurrently, the cryptocurrency market has witnessed noteworthy activity, particularly with Bitcoin's price, which fell 0.8% to $85,480. This decline extends a sell-off from a peak of $126,000 observed earlier, on October 8. Such movements are noteworthy as Bitcoin is often referenced as an inflation hedge, raising questions about its reliability in this economic role.

The broader financial scenario includes significant developments from GoPlus, which by October 2025, had amassed $4.7 million in revenue from its various product lines. This revenue was primarily driven by the GoPlus App, contributing around 53% to the total. Despite thriving financial technologies, Bitcoin faces external pressures, with market dynamics feeling the heat from increased coin supply emerging from dormant wallets resuming activity in exchanges.

Derivatives and market options data reveal an inclination towards a continued downturn, with put options – agreements to sell at a certain price – becoming more prominent than calls, which traditionally indicate a bullish stance. The overarching sentiment suggests market participants are anticipating further depreciation in cryptocurrency values.

Key Insights Table

This economic and financial climate underscores a complex interplay between national fiscal strategies and global cryptocurrency markets, reflecting broader implications for economic policy and investment landscapes.