bitbank maintained a high market share amid intensifying Japanese competition (Dec.2018-Jul. 2019)

Although bitbank have released a pile of articles in crypto space in the Japanese language, we are sure that there is a language barrier. We bet asian countries including, but not limited to China, South Korea, and Japan are hotbeds for crypto. Nevertheless, when stitching information from these areas, the barrier often emerges. We would like to diminish the gap of information caused by different languages and try to deliver articles in English as much as possible.

Here, JVCEA (Certified Association for Crypto Service Providers, enforced on the Japan Payment Service Act) released trade volume of crypto exchanges licensed in Japan. In this article, we will analyze the relationship between monthly domestic spot trading volume and bitbank’s market share to better grasp where we stand in the Japanese cryptocurrency market.

First of all, bitbank’s market share by volume tends to increase as the domestic trading volume and, naturally, bitcoin’s volatility increases (see Fig. 1 and 2). This is no surprise as bitcoin is the most popular and traded cryptocurrency in the Japanese market, and the relatively tight bid-ask spread for BTC/JPY pair at bitbank may be attracting those users who seek efficient trading environment.

The second major reason why bitbank has been keeping a relatively high market share could be explained by the fact that bitbank has been supporting XRP and MONA, two of the most popular cryptocurrencies in Japan next to bitcoin, and providing the vast majority of liquidity against JPY for both of them domestically. As evidenced in Fig. 3, both of these pairs recorded high volume during those months bitbank’s share increased.

Also, this might be a minor factor but the fact that bitbank lists four altcoin/BTC pairs may be contributing as well, since when the price of bitcoin rises against JPY, market participants tend to sell their altcoins against bitcoin.

The reason why the domestic trading volume have an inverse relationship with bitbank’s share in June can be attributed to the parabolic surge of major altcoin/JPY pairs that are not listed on bitbank, such as ETH/JPY, LTC/JPY, and XEM/JPY, and their subsequent pullback during that month.

Fig. 1: Monthly Spot Trade Volume in Japan (L, Bar) and bitbank’s Share (R, Line)
*Volume is converted to USD at 100 JPY = 1 USD rate.
*Source: Japan Virtual Currency Exchange Association

Fig. 2: BTC/JPY and 10-Day Historical Volatility
*The area without the grey overlays shows the same period as Fig. 1.
Source: bitbank.cc

Fig. 3: Daily Spot Trading Volumes for XRP/JPY (top) and MONA/JPY (bottom) from Dec. 2018 to Jul. 2019
*Source: bitbank.cc

On a different note, it is worth noting that despite there has been two new exchanges launched in April and Mayーboth backed by major Japanese firmsーbitbank’s share had increased during that period and recovered 30% threshold in May, demonstrating strong market presence amid bitcoin’s sudden recovery.

Overall, bitbank’s average market share from December 2018 to July 2019 marked 30.2%, gaining on one third of the domestic volume share while competing with 19 other FSA-registered crypto business operators. We could not have achieved this wonderful result without all of our users and we would like to thank each and every one of them. We will do our best to keep our standards high to provide services that our users deserve.

Thank you!

Data analysis provided by Yuya Hasegawa, a market analyst at bitbank, Inc..

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