Trading ETH to JPY
Japanese yen is one of the top three currencies in the world which means there is sufficient demand for it. Japan is also among the top countries in terms of accepting digital assets, which has a big impact on crypto trading and pairs such as the ETH to JPY.
The ETH/JPY has a low level of volatility – this pair may move less than 5 per cent within a day, while it may experience a move of up to 10 per cent within a week. The pair may be good for range-bound traders and those focused on riding the trend.
Another positive aspect of Ether to Yen is that during regular economic conditions severe price retracements are not as common as with other pairs.
What is Ethereum?
Ethereum was introduced in 2015 by a Russian-Canadian programmer Vitaly “Vitalik” Buterin. It is an open-source platform that utilises blockchain technology to create and execute distributed applications (DApps). Users can create or join so-called “smart contracts” directly without third parties, limiting the possibility of fraud.
Ethereum is commonly used as a name of the associated cryptocurrency but in fact Ethereum is the system or network while Ether or ETH is the native currency. Users need to have Ether when they want to execute a certain transaction through the system.
Some interesting facts about the ETH
- The Ethereum project was successfully crowdfunded in the middle of 2014 when it raised more than $18m (£14m).
- At the end of 2015 Ethereum’s price was slightly below $1 (£0.80), by mid-January 2018, it reached its current peak of $1,432 (£1,132).
- Unlike some other cryptocurrencies, there is no maximum supply cap for Ether.
- Ether can be created through “mining” – users receive a reward when they complete a mathematical task and verify transactions.
- The Ethereum Alliance (EEA) is an organisation developed to enhance the future usability of Ethereum.
- Most of the ICO (Initial Coin Offerings) are hosted on the Ethereum blockchain.
What affects Ethereum’s value?
The factors can be divided into two groups – the ETH related and those affecting the general cryptocurrency market.
Ethereum specific factors are:
- The demand for ETH, which is not driven solely by trading activities.
- The acceptance of the Ethereum system by more established financial institutions.
- The increased adoption of smart contracts hosted on the Ethereum platform and the inflow of new users will increase the demand for ETH.
- The degree of mining profitability.
- Improvements in the Ethereum system in the future.
General factors related to the crypto world:
- Changes in regulatory laws and regulations regarding the legality and usage of cryptocurrencies.
- Potential market manipulation by large participants or so-called crypto whales.
- Speculative trading – on June 22, 2017, a multi-million dollar market sell order crashed the ETH price from above $300 (£240) down to $0.10 (£0.08) in a couple of seconds, although the price did bounce back within minutes. One trader reportedly made more than $1m, thanks to an automatic buy order set at $0.10 through which he purchased over 3,000 ETH.
- The number of crypto channels where ETH is available for trading also affect its value.
- The number and strength of ETH competitors.
What is the yen (JPY)?
The Yen became the official currency of Japan in 1871. It was adopted with the aim of stabilising the monetary conditions and replacing a complex monetary system. The Japanese yen is among the most traded currencies on the foreign exchange market after the US dollar and the euro. Also, the Yen is commonly used as a reserve currency.
Which factors affect JPY’s value?
Japan's economy is the third-largest in the world by its GDP. It has a high level of export and, as a result, the country maintains a positive trade balance – the value of its exports is higher than the value of imports.
What does it mean for traders? First, changes in the export levels may cause fluctuations in the JPY value. The top exported goods which are worth monitoring are vehicles, electronic goods, machinery, medical apparatus, iron and steel. Manufacturing sectors in Japan could also influence the foreign exchange rate.
When trading the ETH/JPY pair, check the news and announcements related to the monetary policy by the Bank of Japan (BoJ). Additionally, the statements made by the Ministry of Finance may have a substantial influence on the foreign exchange and the Ethereum to JPY rate.
Adverse economic and political conditions in the Asian region may also have a certain impact on trading ETH to YEN. As Japan is an important player in the foreign exchange markets, the JPY rate is susceptible to changes in the Asian region.
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