Japan Eyes First Bitcoin ETF by 2028: $20 Billion Could Be Waiting

Japan’s progressive government has officially started preparing for its first spot Bitcoin ETF. After approving a new law that recognizes cryptocurrencies as financial assets, regulators are now updating investment fund rules. 

If everything moves forward as planned, Japan could launch its first spot Bitcoin ETF by 2028.

Japan’s New Crypto Law Opens the Door for Bitcoin ETFs

Last week, CoinPedia News reported that Japan officially classifies cryptocurrencies as financial assets under the Financial Instruments and Exchange Act (FIEA), the country’s Financial Services Agency (FSA) is now working on new investment fund rules.

Earlier, cryptocurrencies were mainly treated as payment methods under Japan’s Payment Services Act. The new law gives Bitcoin, Ethereum, XRP, and other digital assets a clearer legal status.

Japan is also planning to cut crypto taxes from 55% to 20%, a move many experts believe could bring even more investors into the market.

According to local reports, regulators are aiming to launch the country’s first spot Bitcoin ETFs on the Tokyo Stock Exchange by 2027 or 2028. 

Japan Bitcoin ETF Could Unlock Nearly $20 Billion

Japan’s ETF market could become one of the largest in Asia once the rules are finalized.

According to estimates from domestic financial institutions, crypto investment trusts, including Bitcoin ETFs, could attract up to JPY 3 trillion (around $19.5 billion) by the end of fiscal 2028.

One reason is portfolio diversification. Aiyu Kiguchi, Executive Director of Investment Management at the National Business Pension Fund, said the fund has started investing in crypto funds managed by overseas hedge funds because Bitcoin’s price movements have a low correlation with the U.S. dollar.

His pension fund manages 21.5 billion yen in assets and plans to initially allocate 1% of its portfolio to digital assets.

If spot Bitcoin ETFs become available, large institutions such as Japan’s Government Pension Investment Fund (GPIF) could eventually gain an easier regulated path into Bitcoin.

Can Japan Repeat the U.S. Bitcoin ETF Success?

Japan’s plans come after the strong performance of U.S. spot Bitcoin ETFs.

Since launching in January 2024, U.S. Bitcoin ETFs have attracted more than $51.68 billion in cumulative net inflows. Combined assets under management have reached $78.81 billion, representing roughly 6.03% of Bitcoin’s circulating supply.

Among them, BlackRock’s iShares Bitcoin Trust (IBIT) has led the market with more than $60.6 billion in cumulative inflows.

If Japan follows a similar path, analysts believe the country could become one of Asia’s largest regulated Bitcoin ETF markets over the next few years.