Japan’s FSA (Financial Services Agency) is considering lifting the ban on Bitcoin ETFs (exchange-traded funds) and reducing the tax burden on crypto investors.

The proposed changes aim to reclassify crypto assets as financial products akin to securities. Such a paradigm shift would enhance investor protection and boost mainstream adoption.

Japan Considers Tax Reforms and Crypto ETF Approval

Japan’s FSA is holding closed-door study sessions with industry experts to discuss regulatory overhauls and market expansion. Specifically, the agency wants to evaluate whether the current regulatory framework can accommodate the growing crypto market.

“The aim is to protect investors by requiring businesses to disclose more detailed information,” local media reported.

Accordingly, they plan to announce a formal system reform policy by June 2025. Similarly, legal amendments will likely be proposed at the 2026 National People’s Congress session. This initiative follows Japan’s broader effort to integrate digital assets into its financial system while ensuring stricter compliance and transparency.

One of the most anticipated changes is reducing Japan’s steep tax rates on crypto profits, which currently reach up to 55%. The FSA is exploring a more favorable tax regime that could decrease the rate to 20%. Such a move would align with capital gains taxes on other financial instruments like stocks.

Additionally, approving Bitcoin spot ETFs would allow institutional investors to participate in the market more securely. According to Hay Insights, Japan, the country’s financial data hub, has lagged behind other markets, such as the US and Canada, in embracing Bitcoin ETFs.

“These financial instruments [Bitcoin ETFs] have gained traction in markets like the United States and Canada, where regulators have approved spot and futures-based ETFs. However, Japan’s approach remains cautious, reflecting its stringent regulatory environment,” HayInsights wrote.

Analysts believe regulatory clarity and lower taxation will attract more institutional and retail investors despite the challenges. It would strengthen Japan’s position as a global crypto hub if it does happen.

Meanwhile, Japan’s positive stance on cryptocurrencies follows a series of regulatory measures to tighten oversight. Two months ago, the FSA warned KuCoin, Bybit, Bitget, and other exchanges about unregistered operations. As BeInCrypto reported, the regulator highlighted concerns about unlicensed trading platforms operating within the country.

Now, Japan has urged app stores to remove these platforms entirely, signaling a crackdown on unregulated crypto businesses.

Furthermore, the agency conducted a comprehensive review of crypto laws four months ago. BeInCrypto reported that tax cuts were a key focus ahead of Japan’s October elections. The move was perceived as an effort to garner support from pro-crypto lawmakers and investors.

Around the same time, Japanese lawmakers proposed adopting Bitcoin reserves and fostering DOGE policy innovation, following in the footsteps of the US.

Therefore, the potential approval of Bitcoin ETFs and tax reductions would mark a significant milestone for Japan’s crypto industry. If implemented, these measures could position Japan as a leading jurisdiction for digital asset investment. Like in the US, the development would attract domestic and international capital.

However, challenges remain. Regulators must strike a balance between fostering innovation and maintaining financial stability. The FSA’s ongoing consultations with industry experts and stakeholders will be crucial in shaping a regulatory framework that encourages responsible growth.

Crypto markets brace for four important US economic events this week, starting Wednesday, February 12. These macroeconomic events could affect the portfolios of Bitcoin (BTC) holders, making it imperative for investors to adjust their trading strategies.

The influence of US economic events on Bitcoin and crypto generally is progressively resurfacing after a dried-up period in 2023.

CPI

The January CPI (Consumer Price Index) report on Wednesday starts the list of US economic data with crypto implications this week. It comes after December’s CPI rate was slightly increased to 2.9% year-over-year (YoY). Meanwhile, the core rate decreased to 3.2%.

In the latest meeting, the Fed kept its main interest rate steady at 4.25%- 4.50%. They articulated the need for continuous improvement in inflation before considering reducing rates. Forecasts from Cleveland Fed’s Inflation Nowcasting model suggest the main CPI rate will come in at 2.85%, representing a modest drop of 0.5%. They also predict the core rate to have slightly decreased to 3.13%.

Beyond US inflation figures, crypto markets will also be keen to hear remarks from Federal Reserve (Fed) Chair Jerome Powell. His testimony is expected to play a crucial role in deciding the direction of US interest rates. What he says about US President Donald Trump’s tariffs will be of significant interest.

BeInCrypto recently reported that the Fed is already concerned about Trump’s policies, prompting their measured rate-cut strategy.

“Many participants suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters,” the December minutes indicated.

The US CPI data could affect risk-on assets like Bitcoin. High inflation would suggest a hawkish Federal Reserve stance, which could decrease the value of risk-on assets like Bitcoin in the short term. Higher interest rates can make traditional investments more attractive.

On the other hand, if CPI data shows lower-than-expected inflation, it may indicate a more dovish stance from the Fed. This would be positive for Bitcoin. Lower inflation rates could increase demand for Bitcoin as investors seek alternative investments to protect their wealth.

Initial Jobless Claims

On Thursday, the US Department of Labor (DoL) will release its weekly jobless claims report, which will shed light on the health of the US labor market. This US economic data indicates the number of people who filed for unemployment insurance last week, providing a snapshot of the labor market’s performance.

The previous initial jobless claims data came in at 219,000 for the week ending February 1. Lower-than-expected claims suggest continued job market strength, potentially signaling steady consumer spending and a resilient economy.

However, such strength might prompt the Fed to consider raising interest rates, which could boost the USD but weigh on Bitcoin.

PPI

Also, on Thursday, the US PPI (Producer Price Index) data will be out, offering insight into inflation at the producer level. It also provides early signals about future consumer prices and can influence investor sentiment.

The US Bureau of Labor Statistics (BLS) report could have crypto implications. This week’s US PPI report will disclose January’s producer-level inflation, with a median forecast of 0.3%. December’s data came in at 0.2% PPI, indicating that inflationary pressures were easing.

A higher-than-expected US PPI reading may indicate increasing production costs, leading to higher consumer prices. Investors may turn to assets like Bitcoin as a hedge against inflation, driving up demand and prices.

Positive or negative surprises in the US PPI data can also influence market sentiment and risk appetite. If the PPI shows rising inflation, investors may seek alternative assets like Bitcoin as a store of value or haven asset.

Conversely, lower-than-expected PPI figures could lead to risk-on sentiment in traditional markets, potentially influencing demand for cryptocurrencies.

Another perspective is the correlation between crypto and traditional markets. If rising PPI leads to a sell-off in equities, some investors may reallocate their capital to Bitcoin and other digital assets.

“CPI and PPI are coming in, but also a strong week for Crypto seems to be on the horizon. This week is comparable to any previous crisis period. During crisis periods, you’d want to be bullish, and max pain is upwards, not down,” crypto analyst Michaël van de Poppe urged.

Retail Sales

US retail sales data provides valuable insights into consumer spending patterns, economic growth, and overall market sentiment. If Friday’s US economic data is better than expected, it would indicate strong consumer spending and confidence in the economy.

This positive economic outlook could spill over into the cryptocurrency market, as investors may interpret it as a sign of overall market strength and stability.

Higher consumer spending could lead to increased disposable income, which some individuals may allocate to cryptocurrencies like Bitcoin.

According to data from BeInCrypto, BTC was trading for $97,040 as of this writing, down by 0.01% since Monday’s session opened.

The Bitcoin (BTC) market witnessed a slight recovery in the past 24 hours following a rather bearish trading week. After a flash crash to $91,000 on February 3, market analysts continue to speculate if Bitcoin found a local bottom and is finally gearing for an upswing. Interestingly, crypto expert Ali Martinez has shared some market insights that could prove valuable to this discourse.

Here’s The Best Time To Buy Bitcoin – Analyst

In an X post on February 7, Martinez revealed the optimal entry condition for investors looking to acquire Bitcoin at the moment.

Using data from CryptoQuant, the analyst notes that the realized price of all BTC acquired in the past 1-3 months stands at $97,354. This data suggests a <1% market loss for traders considering Bitcoin is currently valued at around $97,000. However, Martinez warns that the most favorable buying positions for BTC have historically come when traders are at a 12% loss. Therefore, the Bitcoin market with a <1% average loss may not present the ideal condition for new entrants as there is still strong potential for further price corrections.

Martinez’s observation suggests Bitcoin is likely far from a local bottom despite recent price slumps. Based on the presented historical data, the next local bottom for BTC would be around $85,600 which would present the ideal accumulation zone for investors aiming for significant profit margins. However, it is worth noting that the presence of new variables such as strong institutional interest and corporate accumulation of BTC marked the spot ETF inflows could prevent the premier cryptocurrency from dipping as low as previous cycles to launch its next bullish swing.

BTC Market Overview 

At press time, BTC continues to trade at $97,020 reflecting a 0.75% price gain in the past day. The crypto flagship asset recorded a 2.70% decline in the past week; however, monthly profits remain up by 3.76%.

According to the market prediction site, CoinCodex, investors are presently uncertain with the Fear & Greed Index standing at 44 (fear). However, analysts at Coincodex back Bitcoin to soon rediscover its bullish form despite its ongoing range-bound movement.

Their short-term predictions project BTC to return to $106,613 in five days with the potential to trade as high as $129,434 over the next month. For long-term targets, they forecast a rise to $158,992 in three months. With a market cap of $1.92 trillion, Bitcoin continues to rank as the largest crypto asset with a 60.6% market dominance.

Featured image from Shutterstock, chart from Tradingview