Nomura analysts believe that bitcoin increases Japanese national consumption

nRunaway commentary: According to classical economics wealth effect theory, the more a person feels rich, the more consumption will be, but not limited to liquid assets. The shift in Bitcoin transactions from the renminbi to the yen coincided with the simultaneous rise in domestic consumption levels in Japan. So Nomura Research Institute believes that the rise in the trading volume of bitcoin yen has increased the wealth of domestic bitcoin holders and thus made them more willing to spend.n
nTranslation: Annie_Xun
Nomura believes Bitcoin is evolving into Japan’s wealth effect.n
In the first half of 2017, virtually the majority of transactions in the Bitcoin area were in China almost in the two previous years. Dominant mining, is the location of the largest and most reputable exchanges, short-term trading and long-term speculative activities are many.n
Then in the summer of that year, the Chinese government banned bitcoin. Exchange closed, traders and investors looking for another home to encrypt assets.n
Japan is the best place to be and therefore the first market economy.n
Please see below:n

The figure on the right shows that in November 2017, JPY transactions accounted for 40% of global Bitcoin transactions. Six months ago, that is, in April, the yen accounted for less than 30%, while the dollar traded 35%.n
What is the significance of these?n
Because these analysts at Nomura saw the yen’s trading volume against Bitcoin and speculated that this was the wealth effect in Japan.n
The following can be inferred:n
Analysts believe that the 10 billion yen in wealth growth makes personal consumption rose 200 million to 400 million yen. Now combined with the fact that a lot of trading volumes have been transferred from China to Japan, this growth is in the context of the highest asset-value record in history.n
From these points of view, it is natural to assume that individuals who hold bitcoin (the holdings and the price of their currency have risen in the past six months) are richer.n
Wealth effectn
The classical theory of classical economics describes the above wealth effect, pointing out that the more a person feels rich, the more they consume. And this is not limited to liquid assets. When house prices rise, people feel richer and consume more, even though the disposable income in their bank accounts does not change.n
This is also the basis for Nomura’s view that the Japanese bitcoin caused the wealth effect.n
Whether the result is as expected is unclear, and some believe the cryptocurrency volatility we see may dilute the wealth effect to some extent.n

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