Each Japanese will be paid $930. Why will this money be converted to bitcoin

Each Japanese will be paid $930. Why will this money be converted to bitcoin

By Kluma | InterestingCrypto | 26 May 2020

After the benefits for $1200 began to be paid in the US, the number of deposits for this amount on the Coinbase exchange increased by 4 times. The crypto market in Japan is even more developed, but there are also barriers that can prevent investment in digital money

On may 26, the Japanese authorities began paying each resident of the country a benefit of 100 thousand yen (about $930 at the current exchange rate). According to the Minister of administrative Affairs and communications Sanae Takaichi, the payment of benefits began in 1388 municipalities of the country (79.7% of the total)
The funds for the benefits are taken from an additional budget of 25.6 trillion yen ($237 million) for the current fiscal year, which was approved at the end of April. Yesterday, may 25, the emergency regime was canceled in the country. According to the latest data, 17.3 thousand cases of coronavirus infection were recorded in the country, more than 860 people died, and 14 thousand recovered.

As payments in the United States influenced the bitcoin

In April, the payment to the population was made in the United States. The government of the country has transferred to citizens $1200 allocated as financial support during the crisis. At the same time, the number of deposits for this amount increased 4 times on the American exchange Coinbase.

However, the senior analyst BestChange.ru Nikita Zuborev explained that in absolute terms on the trading platform there was an increase from 0.1% of all deposits to 0.4%. The correlation between the appearance of incentive payments and the movement of the bitcoin price has not been proven, and the theory of their relationship is refuted by statistical and mathematical methods.

On April 17, the average market rate of bitcoin was approximately $7,100, in the next two days it rose by 3% to $7,300, after which it fell sharply on April 20, and reached $6,748 on April 21. From that moment, the value of the asset began to increase sharply. At the moment, the first cryptocurrency costs $8787, 24% more expensive than on the day of payment of $1200 to American citizens. Although, probably, these events are really not connected in any way.

"As before, potential manipulation of whales is a more significant risk than incentive packages in a particular country in the world," Zuborev believes.

Why the Japanese have transferred the payment to the exchange

Vladislav Antonov, an analyst at IAC Alpari, noted that the Japanese are a financially literate nation, and they always try to increase their free funds. Rates on deposits in Japanese banks are near zero, respectively, due to their knowledge, citizens use a different range of proven financial instruments in the currency, stock and cryptocurrency markets.

"The flow of money to the exchanges after payment will be unambiguous, investors will activate trading, especially if they have extra money. But this is not enough to influence the exchange rate of cryptocurrencies and other assets," Antonov is sure.

He added that the exchange rate is partly influenced by the world's Central banks and regulators. The impact of market manipulation is becoming more and more pronounced. The analyst said that a significant part of the Japanese population has trading platforms on their phones and mobile computers.

"In the conditions of phenomenal Internet penetration on all Japanese Islands, the trading activity of private investors will also increase," the expert predicted.

Strict regulation of the crypto market in Japan

Artem Deev, head of the analytical Department of AMarkets, believes that payments may not get to the exchanges, despite the fact that the cryptocurrency market in Japan is extremely developed and investments in digital assets are very popular among the population.

The fact is that since may 1 of this year, the regulation of crypto-exchanges has been significantly tightened. As a result, foreign exchanges, in particular, Binance and BitMEX, began to leave Japan. This trend will not contribute to the growth of investments in digital currencies, as well as increase the capitalization of markets, Deev believes.

The first cryptocurrency could do with support from users from Japan. The asset is trading below the $9000 mark, and earlier five analysts gave a negative forecast for its rate. According to nick Chong of NewsBTC, the price of bitcoin may fall by 50%, since the coin is now in the same position as in 2018, when it fell from $6,400 to $3,150 within a few weeks. The Hash Ribbons indicator, which predicts the capitulation of manners, speaks in favor of the decline. They will have to sell their cryptocurrency reserves to maintain the operation of equipment, the profitability of which has decreased due to the may halving.


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