Behind Bitcoin bawl, Japanese retail investors mound


TOKYO: Japan’s army of retail investors, no strangers to high risk bets in the past, have emerged as a major force in bitcoin’s spectacular rally, now accounting for an estimated 30-50 percent of trading in the cryptocurrency as it spikes to record highs.

Once skeptics, Japanese retail investors have been attracted by the digital currency’s volatility and inefficiencies in pricing that create opportunities to make money on arbitrage between exchanges.

A former stock trader who took up bitcoin trading two-and-a-half years ago, Yoshinori Kobayashi, 39 said, “When I first heard about the bitcoin a few years ago, I thought it was a fraud.”

“But I tried it out after I had come to know some people making money on it. I bought it at 60,000 yen, which quickly become 80,000 yen and I started to regret I hadn’t started earlier,” said Kobayashi, who believes bitcoin is on a long uptrend but took some profits last week.

The spectacular surge in bitcoin, up more than 16-fold this year to above $17,000, has drawn comparisons to the 1970s gold spike or Japanese shares’ rally in the 1980s’ go-go era. Both of those delivered massive gains to Japanese retail investors before plunging sharply.

Statistics on bitcoin and crypto-currencies are patchy because their trading is unregulated in most countries.

According to data compiled by, a Japanese bitcoin website, yen-based bitcoin trades reached a record 4.51 million bitcoins in November, almost a half of the total of the world’s major exchanges of 9.29 million bitcoin.

Industry officials say not all yen-based bitcoin trading is done by Japanese retail players as some hedge funds now trade bitcoin in the yen to take advantage of price differentials between the yen and dollar prices.

Still, many industry officials estimate Japanese account for somewhere between a third and half of global bitcoin trade.

Japan’s global share of the bitcoin market jumped after a clampdown this year by Beijing saw bitcoin trading in yuan almost entirely disappear.

South Korea, another key centre for bitcoin trade, said it would hold an emergency meeting on Friday to discuss the trading of cryptocurrencies amid calls for tighter regulation.

Source: Reuters

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