Japan Isn’t Abandoning Crypto Because of Volatility — It’s Abandoning It Because of Taxes. Brutal, but True.

A recent nationwide survey by financial platform 400F (894 participants, November) exposes a harsh reality: 22.2% of former crypto investors in Japan quit due to tax complexity, while only 19.4% left because of price volatility. Regulation, not the market, is the real killer.

Even among active investors, the pressure is heavy. 61.4% fear volatility, but nearly the same number — 60% — struggle with tax procedures. In Japan, crypto profits fall under “miscellaneous income”, facing taxes of up to 55% including local levies. Every trade must be recorded, converted to yen, and reported annually. For many, the paperwork is worse than the losses.

Meanwhile, traditional investment accounts like NISA and iDeCo offer tax efficiency and easy reporting, making crypto feel outdated and punishing by comparison.

Still, the long-term mindset remains strong. 62.7% invest for wealth accumulation, while only 15.1% chase short-term speculation. Nearly 40% of risk-neutral investors would increase crypto exposure immediately if tax rules were clearer and fairer.

Hope is growing as Japan’s FSA considers reclassifying crypto as a standard financial product and cutting the top tax rate to 20%. If approved, this could ignite a fresh wave of adoption.

Japan isn’t anti-crypto. It’s anti-bad policy. Fix the taxes, and the money will come back.

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