Bitcoin markets change significantly over time, which creates an intriguing paradigm shift. China remains the largest market for Bitcoin trading in terms of volume with a whopping 96% domination. It is followed by the USD market which held this place firmly for a good period of time. Over the past few days, there has been a significant growth in the Japanese market, catapulting it to the second place in terms of volume. After the Mt. Gox debacle, the Bitcoin scenario in Japan has recovered cautiously from that point. Let dive deep into the dynamics to know how exactly Japan took volumes away from USA:
Drop of sales tax and efforts of exchanges:
The Japanese Government has dropped the sales tax on the purchase of Bitcoin and Cryptocurrencies in October. Initially a sales tax of 8% was levied on purchase of any cryptocurrency. While this move is attracting traders, it is also influencing the merchants across Japan for better adoption. Major exchanges in Japan like BitFlyer, Coincheck and Zaif have all launched campaigns that would attract the masses. BitFlyer launched a sophisticated trading platform for professional traders and an illustrated Blockchain explorer that have gone famous. Zaif bitcoin exchange launched an investment service that has been gaining lot of attention. The investment service is dollar cost averaging investment service, shielding users from bad investments.
Increasing merchant adoption:
Right from their launch, BitFlyer and Coincheck have pushed for merchant adoption by promoting Bitcoin transactions across merchants. So as to make Bitcoin a part of daily life, Coincheck has enabled payment of utility bills through Bitcoin. They have a dedicated ‘Coincheck Electricity’ platform that makes this possible. Having bitcoin payment available for something like a utility bill, that has a reliable image, has definitely put bitcoin in positive light. These efforts have surely paid off as Japan now has around 5,270 merchants and websites accepting Bitcoin. BitFlyer has even initiated talks with the Japanese Government for transacting in Bitcoin for Government operated websites and payments.
How does the future look like?
The given rise in volumes should not be treated as a momentary surge but rather as fruits of steady adoption. With Chinese exchanges looking to impose transaction costs on BTC-Yuan trading pair, BTC-Yen looks to be the better alternative. With no service tax, traders would find it lucrative to trade across Japanese exchanges. Especially automated traders that provide volumes to the market would look to cut down on cost through Japan. If not a complete Chinese volumes, at least a part of it would be redirected to Japan restoring its previous glory prior to Mt. Gox debacle.