Bitcoin trading volume in Japan surges, Abe government re-election may be the main reason

According to the Bitcoin trading rankings recently released by Coinmarketcap, Japanese exchange bitFlyer ranks first with a daily trading volume of US$26 million (ranking as of July 13).

Bitcoin trading volume surges in Japan

Some netizens questioned the authenticity of the rankings, because in the Bitcoin trading market, the trading volume of RMB often far exceeds that of USD. Moreover, the tiny trading volume of Japanese Yen against Bitcoin has never been on the list in the past.

BitFlyer CFO Midori Kanemitsu said the above trading volume is real and effective. This phenomenon is likely caused by the zero transaction fee in the Japanese Bitcoin market and competition among large exchanges.

The Japanese Bitcoin market is very competitive, so most exchanges do not charge any fees at all. In addition, affected by the Brexit event, the yen has plummeted, and more and more people are choosing Bitcoin as a hedge.

Japan's election and economic uncertainty

A series of recent political and economic events in Japan have indeed increased Bitcoin trading volume to a certain extent.

One factor was last week's upper house election in Japan, which the Abe government won by a landslide with two-thirds of the country's popular support.

Japan's political system provides that the party with a majority in the upper house of parliament has the right to form a government and amend the constitution. Some articles of the constitution prohibit Japan's military operations abroad, but the Japanese authorities have promised to abolish them soon. Relations between China and Japan have always been very tense due to territorial disputes, and Japan's move is bound to further deteriorate relations between the two countries.

Japanese Prime Minister Shinzo Abe has been committed to his country's economic reforms, which are known as "Abenomics," including loose monetary policy (the monetary policy with a 2% inflation target has caused dissatisfaction in South Korea, China and other countries), active fiscal policy and structural reforms.

Although the Abe government has a high public support rate, many economic experts still say that "Abenomics" is useless and Japan's economic situation has never improved. Some people believe that "Abenomics" is just a beautiful illusion created by Abe to achieve his political goals, using unrealistic promises and market bubbles to win votes and support, paving the way for political plots such as military expansion and constitutional amendment.

Last year, Japan's exports to its major markets (the United States and China) fell by 10%. In addition, domestic inflation remains high, GDP fell by 0.5%, and market analysts expect it to fall even more in the future.

The increase in Bitcoin trading volume in Japan does not mean that ordinary people have suddenly fallen in love with digital currency, but rather it shows the awakening of Japan's financial sector.

Investors are more interested in actual price fluctuations than dry economic theories, so any uncertainty will lead to a series of market activities.

Other factors

The popularity of Bitcoin in Japan may also be due to the increase in foreign exchange trading volume. In addition, the relaxed regulatory policies on the digital currency industry in recent months have also contributed to the increase in Bitcoin trading volume.

Mike Kayamori, CEO of Quoine, a large Japanese exchange, said he believes that Japan's bitcoin trading volume will soon surpass that of Chinese exchanges. He said that Japan's investment culture values ​​the currency itself more, and investment in bitcoin is more out of interest rather than seeing it as an asset that can make money.