TL;DR
- Sanae Takaichi’s electoral victory in Japan triggers an immediate crypto market rally, dubbed the “Takaichi trade”.
- Her platform pledges to slash crypto taxes from 55% to 20% and reclassify major assets as financial products.
- The roadmap targets a crypto ETF launch by 2028, providing regulated exposure for retail investors.
Japan’s ruling Liberal Democrat Party scored a crushing electoral victory on Sunday, placing Sanae Takaichi at the helm with projected seats ranging between 274 and 326 out of the 465-seat lower house. The result marks the strongest mandate for a Japanese leader in recent years and sends clear signals to the global crypto industry.
Markets reacted immediately. USD/JPY climbed 0.2% to reach 157, while BTC/JPY surged nearly 5% in what traders quickly dubbed the “Takaichi trade.” The correlation between her political success and cryptocurrency price movements reveals how seriously investors take her pro-crypto stance.
Takaichi campaigned on promises to overhaul Japan’s approach to crypto assets. Her platform includes slashing crypto taxes from 55% to a flat 20%, a change that could reshape how Japanese investors interact with virtual currencies. The current tax burden places Japan among the least friendly jurisdictions for crypto holders, deterring both retail and institutional participation.
Loss carryforward provisions would allow traders to offset gains with previous losses, bringing crypto taxation closer to traditional securities treatment. Plans also include reclassifying major cryptocurrencies as financial products, a move that could streamline regulations and attract institutional capital.
Crypto ETFs target 2028 launch
The timeline for crypto ETF launches extends to 2028 under Takaichi’s vision. Japan already operates a mature financial product market, and adding crypto exchange-traded funds would provide retail investors with regulated exposure to Bitcoin and other crypto assets. The country processed 120% year-on-year growth in on-chain value received, according to Chainalysis data, demonstrating appetite exists despite current regulatory friction.
Scott Bessent congratulated the new prime minister on social media, calling the victory “historic” and noting it secured “the biggest post-war electoral margin in Japanese history.” He emphasized the U.S.-Japan relationship remains crucial for American strength in Asia, referencing Takaichi’s connection to former President Trump.
The win arrives amid mixed signals for global crypto markets. Major cryptocurrencies fell Sunday after Friday’s recovery rally brought Bitcoin back to $70,000. By Sunday evening, BTC traded at $68,900, down 3% from peak levels. Ethereum dropped 5% to $2,030, while Solana and XRP each declined roughly 3-5%.
Friday’s bounce followed Thursday’s sharp selloff, which pushed Bitcoin briefly to $60,000 in its worst single-day drop since the FTX collapse. The recovery demonstrated resilience but failed to maintain momentum through the weekend. XRP led gains on Friday with a 17% jump as buying pressure accelerated.
Japan’s crypto reforms could influence other Asian nations
China formalized bans on yuan-linked stablecoins and classified most real-world asset tokenization as illegal, creating contrast between the two economic powers. Meanwhile, the White House plans another roundtable with crypto firms and banks this Tuesday to advance the Clarity Act.
Corporate Bitcoin holders rebounded Friday as prices stabilized. Block, the company led by Jack Dorsey, announced cuts affecting up to 10% of staff while deepening focus on Bitcoin mining operations. The firm holds 8,780 BTC worth approximately $622 million.
Takaichi’s electoral success positions Japan to compete more aggressively for crypto business in Asia. The proposed tax changes alone could redirect significant capital flows toward Japanese exchanges and investment vehicles.
