The US Bitcoin exchange market briefly overtook Japan to become the largest Bitcoin exchange market in the world, amidst serious economic uncertainty.
According to various analysts including Lukman Otunuga, currency broker FXTM’s research analyst, the Trump administration’s troubles with former FBI Director James Comey’s memo and the call for impeachment by the Democratic Party have led to wide fluctuations on the US stock market.
"With a growing chorus of Democrats accusing Trump of obstructing justice and even calling for his impeachment, the Trump administration could come to an early season finale,” said Otunuga.
"Even mainstream media analysts have emphasized that Bitcoin, alongside gold, has demonstrated a surge in demand as investors started to seek out for alternative and safe haven assets to protect their wealth."
On Wednesday, Cointelegraph reported that prominent gold investor Mike Maloney, the founder of GoldSilver.com, encouraged other investors to maintain Bitcoin as a mandatory investment in their portfolios in case of market instability and unforeseen economic uncertainty.
“You want to have an alternative monetary system that is already ready to go and those actually exist today. They are called cryptocurrencies. It started with Bitcoin. There have been several others that have been introduced. I own a few of them,” said Maloney.
US vs. Japan
Evidently, an increasing number of investors are moving toward Bitcoin perceiving the digital currency as gold 2.0, a more evolved safe haven asset with transportability and high liquidity, to avoid market instability.
The short-term fall in US stocks, bonds and assets have also allowed the Japanese market to strengthen, leading to the longest economic growth streak in over a decade.
Although mainstream media outlets including CNN and Bloomberg have emphasized the rising demand for Bitcoin amid economic uncertainty, it seems as if strengthening markets such as Japan are giving investors more confidence and resources to invest in cryptocurrencies such as Bitcoin.
Japan’s key to adoption
As Koji Higashi, the co-founder of IndieSquare and a Japan-based analyst, stated, investing in cryptocurrencies has become the norm after the legalization of Bitcoin by the Japanese government and the exemption of taxes for Bitcoin traders.
Higashi wrote:
“Japan is known for its homogeneous culture and the key to adoption of anything is whether people perceive that “everyone else is doing it” or not. So, obviously, it seems we have passed the tipping point in Japan and now it’s suddenly completely “OK” to hop onto the crypto train and people started assuming it’s safe to invest in them because “everyone else is doing it”.”
Tug-of-war
At one of the lowest and sharpest declines of stock markets and assets, the US briefly became the world’s largest Bitcoin exchange market, obtaining a 30 percent market share over the global Bitcoin exchange market. At the time of writing, Japan has already reclaimed its title but the US is maintaining its substantially high market share of 30 percent.
In the upcoming months, if the US market and economy struggle to recover, the Bitcoin market may see the US exchange market overtake Japan again in the near future.