- Japanese cryptocurrency exchange BitBank recorded a 40% increase than the 2020 average the week after the price crash
- Kraken also saw an 83% increase in the account signups over that week
- Less than two months away Bitcoin halving might be playing a part here
During the recent price crash, Japanese retail crypto investors bought the dip, according to a market analyst at Japanese cryptocurrency exchange BitBank, Yuya Hasegawa.
Despite the price of bitcoin tanking, the situation is “vastly” different from the time before the Crypto Winter of 2019 as the volume and change in the number of accounts indicates that retail investors are buying the dip.
Account Registration Jumps 40%
The recent price dump added to the already affected crypto market by the heightened risk sentiment due to COVID-19 and demand for cash in the global markets. As we reported, this massive sell-off was led by the short-term holders who dumped 281k BTC a day before the Black Thursday.
During recent weeks, Bitcoin acted as a risk asset just like the stock market and was no longer considered a safe haven. However, it must be noted that the traditional safe-haven asset gold also experienced a huge loss during this time. But according to Hasegawa,
“underneath the surface, there has been an interesting development in the Japanese crypto market.”
A week after the crash, the weekly account registration of BitBank recorded a 40% increase than the 2020 average. Also, the number of daily Know Your Customer (KYC)-passed accounts were unaffected, rather kept above-average levels in the days following the crash.
The exchange saw a spike in the number of email registrations the day after the crash. This indicates that instead of the retail interest fading in bitcoin, the investors jumped into bitcoin and bought the dip.
Having Driving the Demand?
In 2018 when the bitcoin price bottomed between November and December, the price of bitcoin declined by 50%. At that time, the selling pressure was “strong and persistent” and the price showed no significant rebound during the period of enhanced volume.
At that time, bitcoin bottomed at $3,200 and entered into Crypto Winter. During its hibernation period, bitcoin saw its volatility at record-low levels for a few months. Unlike this time, instead of increasing, bitbank’s daily account registration took a hit.
Moreover, this time the bitcoin price has already jumped over 70%, currently trading above $6,600. And this increment in BTC price combined with the increased daily account registration says,
“the current market recovery is driven largely by retail investors.”
BitBank is not the only with heightened activity, Kraken is another one that saw an 83% increase in the account signups over the week the prices plunged.
A potential reason for this demand, Hasegawa said could be less than two months away bitcoin halving for which Google Trend shows interest is rising. Although there is no knowing if the halving would push Bitcoin’s price upwards, it could be said that the market has started to gradually price the event in and are stacking up their sats at the cheapest price before the halving.