Japanese Crypto Trading Activity Fell as COVID-19 Pandemic Hit in March

The Japan Virtual and Crypto assets Exchange Association has reported that during the COVID-19 pandemic there has been a decline in active crypto-trading in the country.

A report updated by the Japan Virtual and Crypto assets Exchange Association (JVCEA)—Japan’s self-regulating body—revealed that the number of active Japanese crypto-traders fell during the COVID-19 pandemic lockdown.

The data originally published in March indicates that even before the COVID-19 pandemic lockdown, cryptocurrency exchanges in Japan had recorded an increase in fiat deposits but an overall decrease in crypto asset trading.

According to the JVCEA, crypto accounts registered in Japan fell slightly from 2,048,501 in February to 2,044,806 in March—a relatively small decrease of 3,695 of active Japanese crypto-trading accounts.

Crypto Liquidated for Raised Margin Calls

In a blog post, a Japanese Market Analyst named Yuya Hasegawa explained that the slight drop in active crypto accounts did not mean that Japanese investors have lost interest.

In his report on August 3, Hasegawa wrote that based on the JVCEA data—fiat deposits on exchanges in Japan had shown an increase, despite the lower activity of cryptocurrency trading in March.

Hasegawa said, “When the Corona Shock hit the wider financial market and generated demand for margin calls, a good chunk of investors may have withdrawn all their funds to scrape together some cash.” A margin call refers specifically to a broker's demand that an investor deposit additional money or securities into the account so that it is brought up to the minimum value, known as the maintenance margin.

According to Hasegawa, it is unlikely that the decrease in active accounts will have a lasting impact on the Japanese crypto market since the stock market has stopped plummeting and bitcoin sustained relatively high volume during April and May.

He added, “Also, it was quite surprising to see the decrease in the number of active accounts since it kept growing regardless of market trends or price actions, we believe this does not necessarily mean that the Japanese users are losing interest in cryptocurrencies.”

Japan’s New Crypto Friendly Financial Commissioner

Cryptocurrency trade may in fact be getting a good dose of clarity on digital asset trading and tax commitments, which has been a grey in area in Japan for some time.

As recently reported by Blockchain.News, the Japanese government has appointed Ryozo Himino as the next commissioner of the country’s Financial Service Agency (FSA). The crypto-friendly leader is likely to push positive reforms in the industry. A formal announcement is expected to be made later within this month.

Currently, Himino previously served as the International Financial Deputy Counselor, a position that has made him widely known on the international stage. Last year in September, Himino became the first Japanese Chairman of the Standing Committee of the Financial Stability Board (FSB).