Japan Crypto Snapshot — De-Fi Revitalized the Japanese Market (but maybe in an Indirect Way)

By Yuya Hasegawa, a Market Analyst at bitbank, inc..

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.

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Table. 1: Monthly Trade Value and Users’ Holding Amount in Japan
*Value = 1 million JPY
Source: Japan Virtual and Crypto assets Exchange Association
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Table. 2: Monthly Amount and Value of Open Interest and Users’ Crypto Accounts in Japan
*Value = 1 million JPY
Source: Japan Virtual and Crypto assets Exchange Association
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Table. 3: Monthly Amount and Value of BTC in Japan
*Value = 1 million JPY
Source: Japan Virtual and Crypto assets Exchange Association
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Table. 4: Monthly Amount and Value of XRP, ETH, BCC・BCH, MONA, LTC and XEM in Japan
*Value = 1 million JPY
Source: Japan Virtual and Crypto assets Exchange Association

Japan Crypto Market Quick Take

  • The Japanese crypto market adds 109k spot trading accounts in only two months.
  • ETH’s De-Fi-induced rally took the global market by surprise, but Japan’s reaction was rather moderate.

The growth of the Japanese crypto market slowed down due to bitcoin’s post-halving hibernation where its historical volatility (HV) kept gradually decreasing for a little more than two months, sending its 10-day HV below 10% for the first time since October 2018. However, thanks to the De-Fi boom and Microstrategy’s astonishing and trailblazing decision to purchase bitcoin seems to have grabbed Japanese investors’ attention.

While the number of active margin accounts in Japan has been flat for four consecutive months since June, the spot market witnessed the biggest monthly percentage increase in the number of active accounts in August, up 4.39% (or 67k) from July’s 1.53 million accounts. Furthermore, even though there was a slight market crash triggered by the overheated ETH rally at the beginning of September, the Japanese spot crypto market still managed to rake in 42k new accounts. Combined, the market added about 109k active spot accounts in a span of only two months.

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Fig. 2: A Dominance Chart for Monthly Traded Value and Combined Monthly Traded Values of BTC, ETH, XRP, BCC, LTC, XEM, MONA
*Excluding other smaller market cap coins
Source: Japan Virtual and Crypto assets Exchange Association

As pointed out above, one of the possible causes of this market revitalization is the De-Fi boom, which sent the price of ETH to a multi-year high in August. However, judging from the volume of ETH traded during August and September, the vast majority of Japanese investors do not seem to be interested in trading ETH.

Even though the share of ETH’s monthly traded value has been steadily increasing in Japan, BTC still dominates the market as more than 70% of value traded in the Japanese crypto market being represented by the coin. Of course, this does not necessarily mean Japanese investors are not entirely in on the whole De-Fi movement as bitcoin can be used for yield farming as well, but given the total lack of De-Fi tokens listed on Japanese crypto exchanges, the investors are more likely to be drawn to BTC’s heightened volatility, which was in turn caused by ETH.

This goes to support our previous observation that newcomers are likely to be interested only in bitcoin.

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Fig. 2: A Dominance Chart for Monthly Traded Value and Combined Monthly Traded Values of BTC, ETH, XRP, BCC, LTC, XEM, MONA
*Excluding other smaller market cap coins
Source: Japan Virtual and Crypto assets Exchange Association

Notes

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.

English disclaimer is also posted on medium.com

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