Bank

Cryptocurrency

Prime

Apple

Reserve

<h2 id="key-points">Key Points</h2> 
<ul> 
 <li>The Bank of Japan’s potential rate hikes could cause further turmoil in the cryptocurrency market.</li> 
 <li>Japan’s share in the global crypto market is declining, partly due to strict tax rules.</li> 
</ul>  
<p>The global economy has been experiencing significant volatility recently, with cryptocurrencies being significantly affected. </p> 
<p> Notably, the expected interest rate cuts by the Federal Reserve have fueled market concerns. George Lagarias, chief economist at Forvis Mazars, warns that a drastic Fed rate cut could pose substantial risks to the market. </p> 
<h2 id="bank-of-japan-s-stance">Bank of Japan’s Stance</h2> 
<p>Adding to these uncertainties, Bank of Japan’s Governor, Kazuo Ueda, announced on September 3rd that the BOJ would persist in raising interest rates if economic conditions match their forecasts. </p> 
<p> This announcement is crucial considering the dramatic drop of 12% in Japan’s stock market on August 5th, the most significant decline in 37 years. </p> 
<p> This plunge was partially due to the “carry trade” strategy, where investors took advantage of Japan’s low rates to borrow yen for buying profitable US assets. The impact was severe, with tech giants like Apple and Nvidia experiencing substantial declines. However, the crypto market was the hardest hit, suffering its largest single-day drop since 2023. </p> 
<p> Cryptocurrencies like <a href="https://coineagle.com/price/bitcoin/">Bitcoin (BTC)</a> and <a href="https://coineagle.com/price/ethereum/">Ethereum (ETH)</a> saw double-digit losses, while altcoins like Solana and Dogecoin declined by up to 30%. This sell-off led to approximately $1.14 billion in liquidations and wiped nearly $600 billion from the market cap. </p> 
<h2 id="decline-in-japan-s-crypto-market-share">Decline in Japan’s Crypto Market Share</h2> 
<p>In a recent meeting with Liberal Democratic Party officials, Genki Oda, founder of SBI-owned BITPOINT and Chairman of the Japan Cryptocurrency Exchange Association, pointed out Japan’s shrinking role in the global crypto market. </p> 
<p> Oda stated that Japan’s once dominant share of Bitcoin trading volume, which was around 50% from 2017 to 2018, has now reduced to a small fraction of the global total by 2024. This indicates a substantial decline in Japan’s crypto presence. </p> 
<p> He expressed concerns that Japan’s strict tax rules could lead to a decrease in the international competitiveness of Japanese web3-related businesses. </p> 
<p>In response to these developments, Japan’s Financial Services Agency (FSA) proposed a tax reform on August 30th. The request suggested that cryptocurrency should be treated as a financial asset, a viable investment target for the public. </p> 
<p> This reform could offer clearer regulatory guidelines, potentially lessen tax burdens, and promote broader public investment in digital assets. </p> 
<p> With Prime Minister Fumio Kishida’s recent announcement to step down in September, the future of Japan’s economy and its impact on the cryptocurrency ecosystem is particularly intriguing. </p> 
<p> Kishida’s departure could lead to policy changes, which might affect both the broader financial landscape and the regulatory environment for digital assets. </p>

Potential BOJ Rate Rises Stimulate Unease in Japan’s Cryptocurrency Market

Table of Contents

CoinEagle.com

Other articles published on Sep 5, 2024

40 Billion DOGS Tokens Distributed in 48 Hours

Getting paid in crypto: Dubai court ruling shows increasing acceptance

Avalanche Foundation Announces infraBUIDL() Program to Boost Blockchain Tooling and Infrastructure

XRP News Alert: Ripple vs. SEC Shocking Twist; No Ruling Until 2026!

U.S. Spot Bitcoin ETFs Record $37.29M in Net Outflows on September 4

IOTA: A Trusted Partner in Europe

Join our free newsletter for daily crypto updates!