Analysis-Japan's crypto players jostle for market share on regulatory easing hopes

Core Insights - The Japanese crypto market is experiencing a resurgence as exchanges and financial firms are launching new products and services to capitalize on rising investor enthusiasm for digital assets amid expectations of regulatory easing [1][2]. Market Trends - Japanese investors' crypto assets reached a record 5 trillion yen ($33.16 billion) at the end of July, marking a 25% increase from the previous month, despite Bitcoin's price rising only 15% in yen terms during the same period [2]. - As of the end of September, holdings slightly decreased to 4.9 trillion yen, indicating a potential stabilization in the market [3]. Regulatory Environment - Discussions around regulatory changes could attract more retail investors by potentially reducing taxes on crypto gains and easing restrictions on leveraged trading and asset securitization [3][7]. - The Japan Financial Services Agency is working on refining rule changes that may allow for tax treatment of digital-asset gains similar to securities, with potential implementation in 2026 or 2027 [7]. Market Opportunities - There is a significant opportunity for growth in the crypto sector, as there are approximately three times more people with securities accounts than crypto accounts in Japan [4]. - Increased engagement between crypto market makers and Japanese exchanges indicates a focus on enhancing liquidity across various digital assets [5]. Global Context - The Japanese government and regulators are adopting a more favorable stance towards crypto, influenced by the global market dynamics under the Trump administration, to ensure Japan remains competitive [6]. - Japan ranked 19th in global crypto adoption according to a report by Chainalysis, highlighting the need for further growth in this sector [6].