Japan was one of the first countries to legalize cryptocurrencies and establish regulated exchanges under the supervision of the Financial Services Agency. The country has built one of the strictest oversight systems, ensuring a high level of security for investors. However, Japan’s influence in the global market remains limited, according to experts from XWIN Research Japan.
According to analysts, global exchanges hold approximately 2.5 million BTC, of which Japanese exchanges account for only 1%–2%. This is confirmed by trading volumes: over the past 24 hours, the largest trading platforms in the Land of the Rising Sun processed only 658 BTC in spot trades. By comparison, platforms like Coinbase and Binance handle daily trades of tens of thousands of BTC each.
Briefly about the essence of the study
According to analysts at XWIN Research Japan, Japanese crypto exchanges account for no more than 1–2% of all Bitcoin reserves held on centralized exchanges worldwide. This means that the Japanese spot market’s influence on global price movements is limited and largely synchronizes with international trends.
Numbers and observations
The research team provides the following key figures and observations:
- Analysts estimate the total volume of BTC stored on centralized exchanges at approximately 2.5 million coins.
- Japanese trading platforms account for approximately 1–2% of this volume.
- Over the past 24 hours, the largest Japanese platforms have only traded 658 BTC in spot trades—a figure significantly lower than that of players like Coinbase or Binance, whose daily spot turnover amounts to tens of thousands of BTC.
Why Japan’s share is small – factors
The authors of the analysis identify several reasons explaining the modest contribution of Japanese exchanges to global reserves and liquidity:
- Strict regulation. After early legalization of cryptocurrencies, Japan built a detailed oversight system under the Financial Services Agency. This improves security but also limits capital flows and the speed of new product development.
- Market participant structure. Japanese exchanges are dominated by retail traders, while in the US and some other jurisdictions, institutional investors, capable of generating large spot flows, hold a significant share.
- Liquidity shifts to derivatives. The popularity of trading derivatives (such as BitFlyer products or CFDs on some platforms) is drawing volumes away from spot and reducing the concentration of assets in exchange spot wallets.
Market and pricing implications
As a result of these factors, Japanese exchanges have little influence on global Bitcoin pricing: local prices tend to mirror global dynamics rather than dictate them. Nevertheless, the Japanese model has attracted attention as an example of how to combine a high level of oversight and investor protection with stable market performance.
What could change the situation?
Analysts note that significant changes in Japan’s role are possible through a number of institutional steps:
- Changes in tax policy making cryptocurrency investments more attractive for institutions.
- The authorization and launch of exchange-traded products such as cryptocurrency ETFs on the domestic market, which could attract large funds and increase spot liquidity.
- Reducing regulatory barriers for large participants and improving the infrastructure for institutional trading.
Summary
Currently, Japan remains a market with a strong focus on security, transparency, and protection for retail investors—it’s precisely these policies that ensure reliability but also limit scale and institutional presence. If the authorities take measures to stimulate institutional demand, the share of Japanese exchanges in global BTC reserves could increase.
