US President Donald Trump publicly endorsed the coordinated intervention, framing it as a reaffirmation of the US-Japan partnership and a move to protect the global economy. The carry trade unwind and crypto’s collateral damageTraders borrow yen cheaply, convert it to dollars or other currencies, and invest in risk assets, including crypto. Borrowers rush to buy back yen to close their positions, which pushes the yen even higher, which forces more unwinds. In July and August 2024, a smaller yen carry trade unwind contributed to a sharp selloff across risk assets, with Bitcoin dropping meaningfully in the span of days. At 163 yen per dollar, the currency was at its weakest in 40 years, meaning carry trade positions had been accumulating for an extended period.