Why Bitcoin is booming in Japan market? and what is the threat?
By: Fumiko Inada
Tags: Bitcoin

Bitcoin ATM on the street

In Japan, Bitcoin has boomed in 2017. Why JPN people are so enthusiastic for this cryptocurrency these days? How this coin change their life ?

According to various trusted Bitcoin market data providers such as cryptocompare.com, the present trading volume by exchange and total volume over time by JPN currency is 250, 358 BTC (Bitcoins). (https://www.cryptocompare.com/coins/btc/analysis/JPY) This amount occupies almost 39.34% , the biggest number in global Bitcoin exchange market share. Then next one is USD currency for 28.66%. There are several reasons to gain such a high popularity of this bitcoin in Japan.

First of all, one of the reasons is that there is the new regulation to officially make the rules clear for investors in bitcoin market. The Japanese government specified crypto-currency officially in amended the financial settlement law executed in this Apr 2017. The law approves the financial trading company to register to run the operation and also allow investors to use crypto-currency as settlement method officially. After the execution of the law, the big entities , such as electronic shop, BIC CAMERA, or H.I.S, major travel agency have started to accept Bitcoin as settlement means.

Secondly, another big reason is that Japan’s extremely bad economic situation. An increment of bitcoin is correlated to economic instability and financial uncertainly of a large bitcoin market. Holger Zschäpitz, senior editor of the financial desk notes that Japan’s 10years bond yield drop back to 0% and it could turn to negative when BoJ keep printing money crazily (https://twitter.com/Schuldensuehner/status/853859101427761152/photo/1?ref_src=twsrc%5Etfw&ref_url=https%3A%2F%2Fcointelegraph.com%2Fnews%2Fbitcoin-price-may-surge-as-japan-moves-to-print-massive-amounts-of-cash). Furthermore, analyst add that since Japanese government’s continuous printing note will increase the inflation rates in Japan proportionally and the Japanese Yen’s value will decrease in mid term.

Thus, japan’s instability of Japanese Yen and weak economy will create significant impact for Bitcoin market with demand in mid term.

However, some people have different opinions for this perspective. First counterpart opinion is about settlement means function. The article from Nikkei newspaper indicated that some company such as BIC CAMERA and H.I.S is really positive for using Bitcoin as settle means. In their shop, twice in a day, customer uses Bitcoin for payment solution. and BIC CAMERA found that the Bitcoin creates demand of clients and increases a upper limitation from 100 thousand JPY into 300 thousand JPY per shot. However, other companies, Popular Chinese restaurant “Hei chin rou” or Glasses chain store “Megane Super” cannot find big impact from Bitcoin settlement and only found the trial users.

Moreover, another negative opinion related to admin fee. This fee depends on trading company but averagely spreads around 0.0004～0.0005 BTC. Before souring the price of Bitcoin, this amount is equal to only 45–60 JPN. But after the jump up to 1,900USD per BTC, it will increment to 650–1,000JPN. In this case, the investor seriously hesitate to spend such a big cost for daily shopping of small amount. it could be same or bigger amount than actual shopping. Overall, the more the price of bitcoin increases, the admin fee amount could be the break for their incentive of Bitcoin and the less users use the Bitcoin as settlement method.

Furthermore, the third point is that governmental regulation is not enough to protect investors. Koji Higashi, the co-founder Indie Square and researcher of Japanese crypto-currency emphasized that JPN government’s consumer protection are now questionable, given that JPN general consumers could consider small-scale altcoins as alternatives to Bitcoin. Higashi pointed out that the installation of relatively small bitcoin trader such as “Pepecash” which is not listed as “CoinMarket Cap’s Top 100 crypto-currencies list” could make the consumers mislead as Pepecash is the good competitors of Bitcoins but it is actually not at all. Thus, the loose regulation could give the benefit for bitcoin market and players, as it allows the market and consumers which crypto-currency is appropriate or not.

In the conclusion, in Japan, some people argue that there are some reasons such as regulation and economic situation brings positive impact for bitcoin market, on the other hand, others claim that these movements are not fully mature at this moment to support crypto-currencies market.