Nobody puts baby in the corner. The curtain rises and altcoins dance in Japan (Dec.2018-Sep.2019)

Nobody puts baby in the corner. The curtain rises and altcoins dance in Japan (Dec.2018-Sep.2019)

By Yuya Hasegawa, a Market Analyst at bitbank inc..

Quick Take

• The price of LTC moves mostly in tandem with the number of user holding
• During February to April, while the price movement was relatively sideways, user XRP holding kept rising
• When the price of MONA had skyrocketed in June, it led to an increase in user MONA holdings.

The focus of this month is user crypto holdings in Japan.

Fig. 1 shows monthly user BTC, XRP, ETH, BCC (Bitcoin Cash), MONA, and LTC holdings indexed on December 2018. The first notable thing is that despite monthly price movements for BTC, ETH, and BCC’s were bullish during the first half of 2019, users’ holdings of these coins went down or relatively sideways during the same period and rebounded when their prices started to go down in June. This is probably because some holders of these coins started to pull out their funds from exchanges as the prices started to go up, and transferred them back as the prices started to go down for the sake of profit taking or perhaps to minimize loss.

Interestingly, however, as for LTC, its price moves mostly in tandem with the number of user holding. Although, if we look at Table 1, the size of user LTC holdings is significantly smaller than other major coins in the report when denominated in USD. So the market for LTC in Japan is not quite big enough compared with other major coins and thus behaves differently than others.

Even more interesting is XRP. If denominated in USD, user holdings of the coin sometimes exceeds that of BTC (Fig. 2), however, during February to April, when the price movement was relatively sideways, user XRP holding kept rising. Since May, the above-mentioned inverse relationship of price and the size of user holding can be seen, but even after the price of XRP dipped below its 2019 open in July and 2018 low in August, user XRP holdings kept rising. So, who is buying?

As noted in the previous entry, XRP is the most popular coin in Japan next to BTC. And if you are a savvy crypto enthusiast, you may already know that there is a number of people who support XRP and Ripple in Japan (colloquially called the ‘Rippler’), and these massive XRP supporters may be buying the coin at dips, hoping that the price will moon like it did at the end of 2017.

Lastly, the most unique case amongst these coins is MONA. Just like LTC, when the price of MONA had skyrocketed in June (+ 168.7%), it led to an increase in user MONA holdings. However, despite the subsequent and continuing price pull back, the size of user MONA holdings has been increasing. The increase in user MONA holdings in June can be attributed to one Japanese exchange starting ‘buy-and-sell service (trade without order book)’ of MONA in that month. This was a huge deal in Japan since listing of a new coin had not happened in a very long time until then, and the event drove the price of MONA to skyrocket.

However, the above-mentioned exchange was not the first to list MONA to its platform in the country. As mentioned in the previous entry, bitbank has been supporting MONA/JPY and MONA/BTC pairs for quite some time, and after the event, bitbank’s share of user MONA holdings jumped from 27.69% to 30.59%, the biggest monthly increase this year (see Fig. 3), and continued to grow until September. Again, this is probably because market participants who previously bought MONA were trying to sell it at a high price to gain profit or to limit loss.

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Published at Wed, 27 Nov 2019 01:48:08 +0000

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