Global markets are in a state of decline at the beginning of the week, largely due to the Bank of Japan’s decision to raise interest rates. This move had a significant impact on the Nikkei 225 Index, which experienced its worst day since March 2020, dropping 5.9%. The following day, the Nikkei plummeted even further, experiencing its worst day in history with a 12.6% drop. As a result, trading on various platforms, including the Nikkei, KOSPI, Borsa, and Robinhood, had to be halted multiple times.

The cryptocurrency market has also suffered greatly during this sell-off. According to data aggregator Coinglass, over $1.22 billion in liquidations have been triggered, primarily affecting long positions on Bitcoin (BTC) and Ethereum (ETH). The full extent of the damage caused by this market movement is yet to be determined, but there is speculation that some major players in the industry may have been severely impacted.

Despite the turmoil, Tom Lee from Fundstrat remains optimistic, stating in an interview with CNBC that this is likely a short-term scare rather than the start of a long-term downtrend. He believes that the Volatility Index (VIX), which measures expected stock market volatility, could indicate the next move in the short term. However, Lee does not anticipate significant effects on the US markets as a result of the uncertainty stemming from Japan. He suggests that as long as the VIX peaks and starts to decline, the recovery can be swift. Lee also notes that with falling interest rates and the consumer still in good shape, the situation may appear to be a growth scare once it is behind us.

In conclusion, the recent market decline caused by the Bank of Japan’s decision has had a significant impact on global markets. However, experts like Tom Lee believe that this is a temporary setback and that the US economy will remain relatively unaffected. It is crucial for investors to monitor the VIX as an indicator of market movement and exercise caution when making high-risk investments in cryptocurrencies or digital assets.