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Japan’s Crypto Exchanges Rally for 10x Leverage on Margin Trading: Bloomberg

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Japan's Crypto Exchanges Rally for 10x Leverage on Margin Trading: Bloomberg
Japan's Crypto Exchanges Rally for 10x Leverage on Margin Trading: Bloomberg

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Japan’s cryptocurrency exchanges want to offer up to 10 times leverage for margin trading. A broader range of traders, including institutional investors, will be attracted by this move. The Bloomberg report reveals Japan’s crypto industry is trying to enhance trading capabilities and meet market participants’ evolving needs.

Japan’s Initiative to Foster a More Inclusive Crypto Market

Revising margin trading caps aims to attract different kinds of traders, like institutional investors, and make the market more liquid. Through this initiative, more people can participate in trading, and the market will function better.

Cryptocurrency exchanges in Japan are asking regulators to loosen margin trading rules for popular cryptocurrencies like bitcoin (BTC). They believe traders will benefit by easing these restrictions, and the market will get more active.

According to Bloomberg, exchanges in Japan allowed traders to leverage up to 25 times their capital, resulting in $500 billion in trading volume each year in 2020 and 2021.

The Japanese regulators implemented new rules in early 2022 that restricted crypto exchanges to offering leverage of only two times the principal capital.

Throughout the year, trading volumes decreased because of this change. The Japanese Virtual and Crypto Assets Exchange Association (JVCEA), a self-regulatory group of local exchanges, says these restrictions impede market growth and discourage new players.

The association wants leverage limits raised, specifically by at least ten times.

Introducing leverage limits, created a situation where traders had to be more cautious about how they traded and reduce their positions to stay within the leverage limits. T

his reduced trading volumes and harmed the market. The JVCEA believes that raising the leverage limits, it will encourage more traders to enter the market and increase trading volumes.

Japanese Crypto Exchanges Process $110 Million in Daily Trading Volume

In an interview with Bloomberg, JVCEA Vice Chairman Genki Oda said that reworking the leverage rule would make Japan more attractive to crypto and blockchain companies.

Regulators will carefully review the proposals, considering market risks and investor protection. Changes to margin trading limits will be thoroughly assessed and discussed with industry experts.

The regulators will look at how the proposed changes could affect the markets and investors, such as the potential for increased risk and the potential for investors to lose money. They will also consider the potential for increased liquidity and better price discovery.

Margin trading limits are being revised to improve market liquidity and attract more traders, including institutional investors. JVCEA says increasing leverage would help traders make better trading decisions and manage their positions.

According to data, trading volumes on Japanese crypto exchanges reached $110 million within 24 hours. During this time, bitcoin (BTC), ether (ETH), and XRP (XRP) were the most actively traded cryptocurrencies.

This indicates the increasing popularity of these cryptocurrencies in Japan and the growing acceptance of digital assets among Japanese investors. The data also suggests that the Japanese crypto market is maturing, with more institutional investors entering the space.

It’s the highest daily trading volume in Japan since March 2018. The rise in cryptocurrency demand is especially evident among Japanese investors. In the coming months, expect the trend to continue.

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