From aspirational billboards in Tokyo’s chicest districts to looped videos on commuter trains promising “a bright tomorrow”, the rivalry is intense but the underlying ambition shared. For this boom to keep firing, they need “Mrs Watanabe” — Japan’s semi-mythical household investor — to get trading cryptocurrencies. But who is she, how vital has she been to bitcoin’s price surge above ¥2.0m and will her investment interest survive the rival attractions of a strong run for the yen in 2018?
In a note published last week, Tokyo-based analysts at Deutsche Bank had a shot at answering the first two questions, starting with the observation that an awful lot of the global bitcoin trade is indeed driven by Japanese investors trading on margin. Some exchanges put Japan’s average daily share of global volume at 40 per cent, though on some days it exceeds 60. And, despite the platforms’ all-out efforts to seduce Mrs Watanabe, many report that their most active customers remain 30-49-year-old men — the same investor type that, crucially, already accounts for 54 per cent of the global market in leveraged forex trading.
Other explanations for Japan’s embrace of bitcoin include the observation that, since the government declared that bitcoin profits had to be filed in income tax returns, the Japanese have been reluctant to sell and realise gains. Analysts have also resurrected a 2016 survey by the Bank of Japan suggesting that the Japanese are less financially literate than their US counterparts, particularly among the age group thought to be the biggest bitcoin aficionados.
Less well investigated, so far, is whether Japan’s extraordinary fascination with bitcoin arises, in significant part, because the yen has traded with such boringly low volatility this year after the Brexit-Trump high jinx of 2016. GMO Financial, one of Japan’s largest forex trading platforms, says that between January and the end of November, its margin forex volumes were 20 per cent down on the same period in 2016. Whatever Watanabe’s true age or gender, appetite for leveraged risk-taking is not diminished and as long as the yen is dull, bitcoin may remain the winner.
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