Before a state of emergency had officially been declared to slow the spread of the pandemic in Japan, overall activity on crypto exchanges decreased as there was a spike in fiat deposits.
According to data published in March 2020 by the Japan Virtual and Crypto assets Exchange Association (JVCEA), 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 any digital assets.
Deposits increase, activity decreases
Yuya Hasegawa, a Market Analyst at bitbank, reported that though activity among crypto traders decreased in March, the number of fiat deposits on exchanges increased in Japan.
Part of this may have been due to households expecting to receive a 100,000 yen — roughly $940 — stimulus payment which had been proposed by the Japanese government. According to the analyst, many of these deposits did not stay on exchanges very long. Prime Minister Shinzo Abe declared a national state of emergency in Japan beginning April 8.
“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Corona Shock hit the wider financial market and generated demand for margin calls, a good chunk of investors may have withdrawn all their funds from crypto exchanges to scrape up some cash,” said Hasegawa in an August 3 report. “Some investors may have done so to prepare for potential risks, such as reduced income and unemployment, that could be caused by a state of emergency.”
Still trading in Japan
However, Hasegawa says a slight decrease in the number of active accounts “does not necessarily mean that the Japanese users are losing interest in cryptocurrencies.”
If anything, activity may have increased as Bitcoin (BTC) looked particularly bullish in its rise to $12,000. Cointelegraph reported that crypto accounts with generally low activity in Japan had 2-3 times more trading volume this week.