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Deutsche Bank - Japanese retail investors are moving from traditional foreign exchange leverage transactions to the Bitcoin market

According to a recent Deutsche Bank study, more and more Japanese retail investors are moving from leveraged foreign exchange transactions to leverage-encrypted currency transactions, driving the cryptocurrency market. Japan's largest forex platform operators are rolling out their own cryptocurrency exchange, offering up to 25 times leveraged deals.

Masao Muraki, head of research at Deutsche Securities Co., Ltd. (DSI), said last week that Japanese retail investors are increasingly shifting from traditional foreign exchange transactions to cryptocurrencies. DSI is a member of Deutsche Bank Group.

Muraki explained that just after investors failed to reach their profit targets in the leveraged foreign exchange markets, they are turning their attention to leveraged cryptocurrencies.

He also said that "cryptocurrency speculation is evolving to a scale that can not be ignored." He stated:

"I think retail investors are moving from leveraged foreign exchange transactions to leveraged cryptocurrency transactions ... Japanese male leveraged foreign exchange investors aged 30 to 40 are pushing cryptocurrencies."
The analyst pointed out that Japan accounted for 54% of global foreign exchange transactions. According to GMO Click Securities, one of the world's largest forex trading platforms, 79% of Japanese foreign exchange account holders are men, of whom 63% are between 30 and 49 years of age.

Japanese retail investors are also called Watanabe, although they are mostly men. However, they are traditionally responsible for housewives managing family finances.

High risk, high return

Leveraged crypto currency trading services are available in Japan. For example, GMO Coin offers 5x, 15x and 25x Bitcoin - Yen leverage trading.

There is no transaction fee for these transactions, but a 0.05% leverage fee per day is required. GMO Coin is the cryptocurrency subsidiary of GMO Internet, Japan's largest Internet company, and the owner of GMO Click Securities.

The Financial Times quoted Muraki as saying:

"Some large foreign exchange brokers are using the same 25-fold leverage limit, but there is no direct leverage in crypto-currency trading."
The analyst said cryptocurrency trading could take 10 minutes or more, "because of the greater intraday volatility, there is a greater risk of cryptographic transactions than cryptocurrency losses in cryptographic transactions over normal FX trading."

However, he also pointed out that "Japanese investors hold a positive view on volatility," he added. "A typical Japanese investment style is the combination of low-risk - low-return deposits and high-risk-high-return investments.

Foreign exchange platform operators to enter the cryptocurrency trading business

Since the government in Japan saw bitcoin as a legal payment method in April of this year, more and more leading Japanese foreign exchange platforms are developing cryptocurrencies.

More and more companies are starting to register with the Japan Financial Services Agency (FSA) in order to be able to provide their wife with bitcoin products and services.

In May of this year, GMO Internet launched its own bitcoin brokerage service, GMO Coin.

SBI FX Trade, a foreign exchange subsidiary of the SBI Group, is offering eight different cryptocurrencies, including an exchange, SBI Virtual Currencies.

Money Partners FX, Forex platform for the Money Partners Group, invests in operators of the cryptocurrency exchange Kraken and the Tech Bureau, the Zaif Exchange. The group also announced plans to launch a cryptocurrency exchange. Securities of Mitsubishi UFJ Financial Group is also offering foreign exchange margin trading services and plans to launch its own cryptocurrency exchange.