Japan has long been seen as a global cryptocurrency capital, with trading volumes on its local exchanges reaching dizzying heights. With the exponential increase in prices last year, the number of market participants also ramped up.
Overall, 2017 was a watershed year for the virtual asset class in Japan. A recent survey by Japan’s Financial Services Agency (FSA) confirmed that just under 3.5 million investors had holdings in at least one cryptocurrency.
The average of cryptocurrency user’s age was the same as many normal investment curves with a greater participation from the middle-age group. Of the record number that the crypto space attracted, Japanese investors in their 20s, 30s, and 40s are the biggest drivers of the bitcoin boom. During the January-March period, the three segments accounted for 28, 34, and 22 percent respectively.
The most common reason for getting into the market, according to the survey, was the perception of strong profits as the economy has seen years of ultra-low interest rates offering little in the way of traditional returns.
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The data also shows that many Japanese investors are engaged in leveraged trading, using borrowed funds. The country is believed to have had about $543 billion in leveraged virtual currency trading, per a report from a self-regulatory body.
Considering how closely involved many Japanese retail investors are in the online trading space, it’s no surprise that Japanese retail investors have become major players in cryptocurrency markets.
Japan accounts for over 50 percent of global FX margin trading and it’s believed that many investors were shifting from the foreign exchange markets to leveraged cryptocurrency trading.
Figures published by the Japanese Cryptocurrency Business Association (JCBA) have also revealed that the booming digital-currency market continues to attract record levels of trading volumes in the underlying market.
With more than $97 billion in turnover of the underlying bitcoin, the 2017 figures show an increase of more than 300.000 percent from only $22 million back in 2014. In addition, the number of traders investing in leveraged cryptocurrency instruments was estimated at more than 140,000 as of the end of the reported period.