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Japan Crypto Market Outlook

by S. Jack Heffernan Ph.D
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The Japanese crypto market is one of the largest and most active in the world.

According to the Japan Virtual Currency Exchange Association (JVCEA), the total market capitalization of all cryptocurrencies listed on the 16 regulated exchanges in Japan is over $200 billion is only a fraction of the total Crypto investment.

According to a survey conducted by the Japanese Financial Services Agency, the average Japanese adult holds approximately $3,500 worth of crypto currency, making Japan the largest crypto currency holder in the world per capita. This is more than double the amount held by the average American and more than three times that of the average European. The survey also found that roughly two-thirds of the Japanese population owns some form of cryptocurrency, and the top three crypto currencies are Bitcoin, Ethereum, and Ripple. KXCO is set to become popular as a Digital Asset market covering traditional as well as Crypto assets.

Japan, the world’s third-largest economy, is likely to enter a recession in 2023, Capital Economics told CNBC on Tuesday. The warning comes as inflation in the country hit the highest in over four decades in October, driven by a weak yen and imported cost pressures.

Cryptocurrencies have become increasingly popular in recent years, and some experts believe they could potentially be used as a hedge against economic recessions. Cryptocurrencies are digital currencies that are not backed by any government or central bank, and their decentralized nature makes them more resistant to economic downturns. In addition, cryptocurrencies are not subject to inflation and are not tied to any specific country, so they may provide investors with some protection against currency devaluation. Furthermore, cryptocurrencies are becoming increasingly accepted by merchants, so they may provide some liquidity during a recession.

At the same time, cryptocurrencies are still relatively new and highly volatile, so they may not be the best investment during a recession. Cryptocurrencies are subject to market speculation and can be highly unpredictable, so investors should be aware of the risks associated with investing in them. Lastly, cryptocurrencies are not insured by any government or financial institution, so if a user’s wallet is compromised, they could lose their entire investment. Ultimately, whether or not cryptocurrencies are a good investment during a recession depends on the individual investor’s risk tolerance and investment strategy. Investors who are looking for assistance in managing their portfolio can do so by signing up with KXCO or looking at other Cryto Exposure like $FBX.

According to Marcel Thieliant, senior Japan economist at the consultancy, the recession will “mostly be driven by a drop in exports and also by becoming more cautious, which is typically what you see when exports start to fall.” 

Japan recently reported a larger-than-expected trade deficit of $15 billion for the month of October. Statistics show that exports rose by 25.3%, slower than a year-on-year growth of 28.9% seen in September. Meanwhile, imports soared by 53.5% on an annual basis in October, higher than a year-on-year growth of 45% in the previous month.

The government is due to release a revised third quarter GDP report on Thursday. Analysts polled by Reuters expect a 1.1% annualized contraction for the July to September period. That would follow a 1.2% contraction in the previous quarter and could mean the economy is already headed for what is commonly categorized as a technical recession, or two consecutive quarters of negative growth.

Thieliant assumed that the Bank of Japan will stick to its ultra-dovish monetary policy and will not start raising benchmark interest rates, especially amid recessionary concerns.

“The [central] bank has indicated that it wants to see sustainable inflation and the kind of cost-push inflation that we are seeing now is not sustainable,” said the economist.

The amount of money that will flow in to Crypto as the local economy stalls could be significant.

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