This is a contributing article written by Yuya Hasegawa, a Market Analyst at bitbank, inc..
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This article is based on official information of Cryptocurrency Monthly Trade Data published by JVCEA (Japan Virtual and Crypto assets Exchange Association), which is a Self-Regulatory Organization named by Financial Services Agency in Japan. Formerly known as the Japan Virtual Currencies Exchange Association, the organization has revised its name to its current one due to changes in Japan’s regulatory rules.
- # of active accounts stalls as bitcoin suffered record-low volatility
- Meanwhile, bitbank’s spot volume share soars as we added new trading pairs
Market Growth Stalls as Bitcoin Went into Hibernation
Bitcoin’s record-low volatility back in July seems to have stalled growth of Japan’s crypto market. The market saw a strong monthly increase in the number of active accounts for both spot and margin accounts in May; however, the growth in the number of active accounts in July were quite minuscule compared to other average months.
The spot market added only 2750 active accounts (+0.18%) since the end of June, the smallest monthly increase as far as we can know. For the number of active margin accounts, the gain was much less in terms of percentage change, with only 0.06% increase from the previous month.
Although it is still quite impressive that both markets saw even a little bit of growth in July, given the fact that post-halving bitcoin surprisingly went into about one-and-a-half-month-long hibernation where its volatility had hit pretty much rock bottom (Fig. 2), subverting the charm of ‘high-risk, high-return’ asset.
Its 30-day historical volatility (HV) had plunged below 20% for the first time since Nov. 2018, and its 10-day HV reached below 10% for the first time since Oct. 2018. In other words, July was an unusually quiet month for traders, and given the leverage regulation and unkind tax system in place in the Japanese crypto market, traders would have probably been simply better off trading forex during the month of July.
Our Spot Altcoin Volume Share in Japan Soars behind Bitcoin’s Quietness
As a crypto exchange, bitcoin’s quietness was raising concerns about capital outflow and low trading volume, but there were some other developments behind the scenes: bitbank’s monthly volume share for some of the popular altcoins soared quite significantly.
As can be seen in Fig. 3, our volume share for Ethereum (ETH) and Litecoin (LTC) in the Japanese market dramatically increased since June and they both surpassed their respective all time highs in July. Also, our XRP volume share struggled to bounce back throughout 2019, but it has been steadily increasing and seems to be on the course of recovering 80%.
We added new trading pairs for these coins (ETH/JPY, LTC/JPY, and XRP/BTC) back in May and started a zero-trading-fee campaign for ETH and LTC, so it is quite obvious that they contributed significantly to achieving such high shares.
Of course, for the past year, overall traded volume for altcoins in Japan has been overshadowed by that of bitcoin, but as we know, the DeFi boom has pushed the price of ETH higher and more volatile, so we are looking forward to seeing some changes in dominance structure for monthly traded value in the coming months.
Above all, we would like to say thank you to all our users for choosing bitbank among others. We truly appreciate your support!
On Table .1 and Table .2
“Trade Value ‘’ includes a numerical value by trade agencies to the other cryptocurrency exchanges. “Amount” and “Value” of open interest of margin trade don’t include a numerical value by trade agencies to the other cryptocurrency exchanges. “Base Accounts” includes the accounts for the purpose of agency trade to the other cryptocurrency exchanges. “Total Accounts” includes the series of accounts for the purpose of compatible use of spot trade and margin trade. “Active Accounts” means the accounts by which users trade at least once in each month, or by which there remain some amount of cryptocurrencies or JPY. “Trade Value ‘’ and ”Open Interest of Margin Trade ‘’ were aggregated apart from one member company of JVCEA. Lastly, “Trade value” is a numerical value calculated from the first day to the last day of each month. “Users’ Holding Amount”, “Open Interest of Margin Trade”, and “Users’ Crypto Accounts” are as of the last day of each month.
On Table .3
This table is a series of data of users’ monthly BTC holding of each month. “Spot” is the amount of BTC deposited by users and its evaluated value. “Open Interest of Margin Trade ‘’ is the amount of open interest held by users and its evaluated value. This table excludes the result of trade agency to the other cryptocurrency exchanges. Each numerical datum is as of the last day of each month. ”Open Interest of Margin Trade ‘’ was aggregated apart from one member company of JVCEA.
On Table .4
“Value” of each cryptocurrency is the aggregation of the valuations reported by each JVCEA member company. Each JVCEA member company calculates the valuation on the deposited amount by users multiplied by each companies’ final valuation rate. This table is based on the types of cryptocurrencies, which three or more JVCEA member companies list. The types of cryptocurrencies will be reviewed once a year. This table excludes the result of trade agency to the other cryptocurrency exchanges. Each numerical datum is as of the last day of each month.