Japan’s COVID-19 Stimulus Payments Didn’t Flow Into Crypto


In April, the Japanese government began distributing 100,000 yen payments — about $930 —  to every household. But did the Japanese follow some in the United States and spend that money in crypto exchanges? The data from the three major crypto exchanges in Japan suggests they probably did not. 

In his latest report, Yuya Hasegawa, a market analyst at Bitbank exchange notes some “irregularities” in the month of June in terms of deposits but overall concludes that the coronavirus relief payments did not result in significant changes to the behavior of Japanese crypto investors. 

There were some changes to normal. The number of 100K yen deposits from investors in their 40s was up more than 36%, surpassing that from investors in their 20s for the first time in two months. The number of 100K yen deposits from investors in their 50s increased by more than 35%. 

But according to Hasegawa, those changes are “too minuscule to alter overall investor behavior in any significant way”. By comparing the number of deposits in June with “previous months that recorded roughly the same amount of monthly BTC volume in the past (ie. Sep 19〜Dec 19”, he observed: 

 “The number of deposits and the degree of increase is a little too small to conclude, with confidence, that a number of Japanese investors are using their stimulus checks to buy crypto (emphasis on ‘a number of’)” 

BitFlyer and Coincheck on the Covid-19 stimulus check

Cointelegraph asked exchanges BitFlyer and Coincheck to check the number of 100K yen deposits since April. By and large the results confirmed the Covid-19 stimulus payment had little impact on crypto purchases

BitFlyer compared the month of February with April, May, and June. The number of 100K yen deposits increased from 1.1 to 1.2 times from April to June. The rate of increase was small and BitFlyer said it couldn’t conclude if the number was buoyed by the coronavirus rescue stimulus. 

According to Coincheck, the number of 100K yen deposits gradually increased between January to April but stopped increasing in May. It decreased in the second quarter compared with the first quarter. 

Why the small impact? 

Why did Japanese investors shy away from using the relief money for crypto investments? Hasegawa suggested it could be related to the “Japanese consumer’s tendential characteristic towards investment”: 

“In Japan, average households allocate only about 15% of their funds to financial products (excluding insurance, pension, and standardized guarantee scheme) and a little over 50% to savings, whereas the average US and EU households allocate more to financial products and less to their savings.”

As Cointelegraph reported, on July 13th, the Bank of Japan revealed that the supply of M3 in the country — essentially the volume of deposits by individuals, corporations, and local governments excluding financial institutions— increased 5.9% in June to $13.5 trillion.