TOKYO • Bitcoin’s about to boost the world’s third-largest economy, according to analysts at Nomura Holdings Inc.
The digital coin’s 1,500% rally this year has left crypto-crazed Japanese investors likely sitting on hefty gains that Nomura thinks will spur consumer spending.
“Rises in asset values often result in a rise in consumer spending, too, known as the wealth effect,” the team, led by Yoshiyuki Suimon, wrote last Friday. “We estimate the wealth effect from unrealised gains on bitcoin trading by Japanese investors since the start of fiscal year 2017, and estimate a potential boost to consumer spending of ¥23.2 billion (RM835.59 million)-¥96 billion.”
The note points out that trading volume in the bitcoin market is roughly 40% yen, which is larger than even the US dollar’s share.
Bitcoin has fallen about 25% since closing in on US$20,000 (RM81,176) on Dec 18, trading around US$14,500 in New York last Friday afternoon. Still, Nomura is confident that the share of investors who have benefitted is much larger than those who may have lost money due to the recent decline.
“Moreover, the fact that the rise in bitcoin prices was concentrated in 2017 fourth quarter (4Q) could result in the wealth effect materialising in
2018 1Q, and if that is the case, we estimate a potential boost to real gross domestic product growth on an annualised quarter over quarter basis of up to about 0.3 percentage points,” Nomura said. — Bloomberg