• Bitcoin’s price in Yen surpassed the previous record set by bitcoin prices denominated in U.S. dollars, Euros, British Pounds, and Australian Dollars.
  • The Japanese yen has been weakened by the Bank of Japan’s continued money printing and inflation resurgent.

Fiat currencies such as the U.S. Dollar, Japanese Yen, Euro, and many others, are not backed up by hard assets. Their value is subject to market perceptions and can change at any time. BTC Price Index and Live Chart – CoinDesk”>(BTC) ongoing rally is telling of current market perceptions, with sentiment being weakest for the yen (JPY) among major fiat currencies.

On bitFLYER, a cryptocurrency exchange based in Tokyo, the leading cryptocurrency – often referred to as digital gold – hit a record high early Monday of 7,9 million yen. According to TradingView, the dollar-denominated cryptocurrency price was above $52,000, or 32% below the record high reached in November 2021 of $69,000.

The price differential reflects the relative stress on the Japanese currency, which is a result of the Bank of Japan (BOJ) continuing liquidity easing and signs of economic weakening. The Japanese economy entered a recession at the end last year. It was ranked fourth behind Germany.

The BOJ continued to print tons of fiat currency while the Federal Reserve, other central banks and the BOJ raised interest rates aggressively between 2022 and 2023 in order to control inflation.

Japan’s core inflation, which excludes the volatile food and energy component from the consumer price index, climbed 3.1% in 2023, marking its biggest gain since 1982. Inflation reduces the purchasing power fiat currencies, and encourages investment in alternative assets that have a store of value appeal like gold and bitcoin.

It is important to note that Hong Kong, Singapore, and Japan have more clear legal guidelines regarding the trading of digital assets than other developed markets. This, combined with the persistent volatility of fiat currencies in these regions, could encourage the growth in alternative assets such as cryptocurrencies.

BTC is trading at record highs versus the Japanese yen. (TradingView) (TradingView)

Parikshit Miishra is the editor.