Before the state of emergency was formally declared to slow the spread of the epidemic in Japan, public activity on cryptocurrency exchanges decreased as paper deposits increased.
According to data released by the Japan Virtual Asset Exchange Association (JVCEA) in March 2020, the number of active crypto accounts registered in the country decreased from 2,048,501 in February to 2,044,806 in March. This means that 3,695 fewer accounts may not have traded digital assets.
Deposits increase, activity decreases
Yuya Hasegawa, a market analyst at bitbank, reports that the number of fiat deposits on exchanges in Japan has increased, despite a decline in activity among cryptocurrency traders in March.
Some of this may be due to households expecting a proposed stimulus payment from the Japanese government of 100,000 yen (roughly $ 940). According to the analyst, many of these deposits did not remain on the stock exchanges for a long time. Japanese Prime Minister Shinzo Abe declared a state of emergency in Japan on April 8th.
“When the coronavirus shock hit the broader financial market and generated demand for margin calls, a large portion of investors may have withdrawn all of their money from cryptocurrency exchanges to raise some cash,” Hasegawa said in the August 3 report. “Some investors may have done this to prepare for potential risks, such as reduced income and unemployment, that the emergency may cause.”
Still trading in Japan
However, according to Hasegawa, a slight decrease in the number of active accounts does not necessarily mean that Japanese users will lose interest in cryptocurrencies.
If anything, activity might have rebounded because Bitcoin (BTC) looked particularly bullish as it rose to $ 12,000. Cointelegraph reports that generally low-activity cryptocurrency accounts in Japan have had trading volume 2-3 times this week.