Japan Leads Bitcoin Trading

Posted by Josh Blatchford | Bitcoin

Earlier this year, the biggest trading market for Bitcoin was China. Even Business Insider reported on China’s importance to Bitcoin trading back in January. The yuan was the top currency exchanged for Bitcoin in 2016 and through mid-2017.

Traders took it as a given that China would be the #1 market for the foreseeable future for a couple of reasons including no fee trades on local exchanges and the powerful central bank PBoC (People’s Bank of China) not making any major moves to stifle trading activity despite Bitcoin being illegal as a payment method there.

But now there is a new number one.

Enter Japan

Cointelegraph reports that Japan took over as the top country trading in Bitcoin this spring displacing China to third with the USD second, followed by the South Korean Won, Euro, and Polish Zloty to round out the top 6.

CryptoCompare, a great site for Bitcoin info, tracks this activity daily. Here is what it looks like today:

Here the top 5 are consistent with earlier this year but in a different order since by currency we have:

  1. Japan
  2. US
  3. South Korea (Won)
  4. Euro
  5. Yuan/Renminbi

Japan is far and away the top with 40% of the daily trading activity while China is down below 5%. Japan and the US are 73% of current trading activity.

Where Japanese Buy

Our last few posts have been on technical trading tools, but fundamentals matter too. As more people discover Bitcoin then its value SHOULD increase, right? This is a classic fundamental argument.

For our savers and traders, the trend of more Japanese buying is important to follow so here are a couple exchanges where they buy that you can use in your own research to track Japanese BTC interest.

  • Bitflyer: one of the largest serving Japan and daily trading is anywhere from 5-10% of ALL Bitcoin trades
  • Coincheck
  • Kraken
  • Bitfinex: one of our participating exchanges in your trading account

Going to these sites or sites like CryptoCompare or CoinMarketCap can help you see how much Bitcoin activity is going through these exchanges.

Regulation in Japan

In April, Japan passed the friendliest Bitcoin legislation from any Western nation. The Financial Services Agency (FSA and the Japanese equivalent of SEC or FCA) recognizes BTC as a payment method but also puts capital requirements on Bitcoin exchanges like a yen-based stock or investment exchange would have.

The April law also requires anti-money laundering and know your customer (AML/KYC) implementations by exchanges. Coindesk reports that ‘surveillance’ and observation of the exchanges to ensure they are complying with the new law are in place and will increase in scrutiny starting in October.

You’d be right if you thought some of this regulation is Mt Gox related, but it’s also common sense regulation to help exchanges and protect customers.

As traders, you now have another entity, the Japanese FSA, along with the SEC/Dept of Treasury/CFTC in the US and the PBoC in China to keep an eye on if you trade based on fundamentals. These 3 country financial entities influence 80% of Bitcoin’s daily trades, so like it or not, what they say matters. At least for the moment…..

Do you think Japan’s new interest and regulations for Bitcoin are a good thing? Find us on Twitter @Magnr and tell us your thoughts.