Japan's 6 Major Asset Management Giants Enter the Crypto Fund Race! MicroStrategy's BTC Reserves Face Challenges in Asia

Japan’s six largest asset management firms (managing a total of $2.5 trillion) have expressed interest in launching crypto funds, including Mitsubishi UFJ Asset Management, Nomura Asset Management, SBI Global Asset Management, Daiwa Asset Management, Asemane One, and Amova Asset Management. This development poses a potential challenge to Bitcoin-themed stocks like MicroStrategy (MSTR).

Japanese Financial Giants Publicly Enter the Crypto Market

(Source: The Nikkei)

A report published by The Nikkei on Thursday confirmed that Mitsubishi UFJ Asset Management, Nomura Asset Management, SBI Global Asset Management, Daiwa Asset Management, Asemane One, and Amova Asset Management have all shown interest in crypto funds. These six firms collectively manage assets worth $2.5 trillion, representing the dominant players in Japan’s asset management industry.

Mitsubishi UFJ Asset Management is a subsidiary of Mitsubishi UFJ Financial Group, one of the world’s largest financial institutions with total assets around $2.7 trillion. In recent years, Mitsubishi UFJ Bank has been exploring various blockchain and cryptocurrency-related projects, including stablecoin interoperability platforms. The entry of such major financial giants into the crypto space significantly exceeds the influence of any single Bitcoin-themed stock.

Nomura Securities is Japan’s largest wealth management firm, claiming to manage ¥153 trillion in client assets, accounting for about 15% of the domestic market. As of March 2024, Daiwa Asset Management managed approximately $213 billion. The collective actions of these institutions indicate a fundamental shift in Japan’s financial industry attitude.

It is reported that these companies are interested in offering new crypto trust products to retail and institutional investors. Japan’s top financial regulator also expressed support. The Nikkei reports: “Financial Services Agency (FSA) is considering allowing the establishment of investment trusts containing cryptocurrencies. This could further accelerate Japan’s crypto investment environment.”

Potential Impact on Bitcoin-Related Stocks like MicroStrategy

This development presents a significant challenge to Bitcoin-related stocks such as MicroStrategy. MicroStrategy has long been a primary avenue for investors to gain Bitcoin exposure, especially for institutional investors unable to hold cryptocurrencies directly. However, the crypto trust products launched by Japan’s asset management giants will offer more compliant, transparent, and tax-efficient alternatives.

MicroStrategy’s business model involves issuing bonds and stocks to finance Bitcoin purchases, providing investors with an indirect way to hold Bitcoin. But this model has structural flaws: high financing costs, premium volatility risks, and recent threats of MSCI index exclusion. In contrast, the crypto trust products offered by Japanese asset managers will be tightly regulated, more transparent, and free from index exclusion risks.

Comparison: Japan Crypto Funds vs. MicroStrategy Model

Compliance: Regulated by FSA vs. Index exclusion risk for MicroStrategy

Taxation: 20% post-reform vs. US capital gains up to 37%

Transparency: Periodic disclosure of holdings vs. MicroStrategy’s mNAV premium volatility

Financing Costs: Fund management fees typically 1-2% vs. MicroStrategy’s bond rates at 10-11%

For Japanese investors, if they can access Bitcoin exposure through compliant funds offered by Nomura or Mitsubishi UFJ, why take the risk of investing in Bitcoin-related stocks facing regulatory uncertainties? This question not only applies to the Japanese market but may also influence global investor perceptions of valuation for companies like MicroStrategy.

Global Regulatory Trends Drive Japan’s Shift

Although Japan has historically maintained a cautious stance on digital assets—especially after several costly hacks of crypto exchanges—the changing trends in the US and Europe appear to be influencing Japan’s financial sector. The EU’s comprehensive cryptocurrency regulation called “MiCA” is set to take effect in 2025.

Since President Trump’s inauguration in 2025, the US government has appointed several crypto-friendly officials and signed landmark stablecoin legislation. This global regulatory environment improvement provides Japan with a policy reference framework.

Japanese crypto journalist K. Kobayashi explained on Coin Post: “As the US approves Bitcoin spot ETFs, many Japanese investors are now looking forward to the appearance of crypto investment trusts.” This expectation reflects strong investor demand for compliant crypto products.

Although Japanese law does not permit fund managers to include cryptocurrencies in their portfolios, recent months have seen the Financial Services Agency push for deregulation as Tokyo seeks to reposition itself as a regional hub for crypto businesses. Early this month, a source from Japan’s Financial Services Agency told another major Japanese newspaper that they are preparing to reclassify Bitcoin, Ethereum, and over 100 altcoins as financial products.

Tax Reform as a Key Catalyst

Kobayashi warns that whether these six companies will take action depends on whether the FSA will further ease regulations. He states, “Including cryptocurrencies in investment trusts hinges on tax reforms.” Reform advocates want the government to impose a unified capital gains tax of 20% on crypto profits, similar to stock investments.

Currently, tax authorities treat crypto gains as “other income,” which could result in the highest-income earners paying up to 55% in taxes on their crypto earnings. This punitive tax rate severely hampers Japan’s crypto market development and is one reason many Japanese investors turn to offshore Bitcoin stocks like MicroStrategy.

If tax reforms reduce the rate to 20%, it would fundamentally change Japan’s crypto investment economics. Investors would prefer direct investment through compliant domestic funds rather than indirect overseas Bitcoin stock investments. This would pose a direct challenge to companies like MicroStrategy in the Japanese market.

Reshaping the Asian Crypto Market Landscape

The collective actions of Japan’s asset management giants could trigger follow-on effects in other Asian markets. Hong Kong and Singapore have already launched crypto ETFs and regulatory frameworks. If Japan joins this race, it will create a competitive landscape among Asia’s three major financial centers for crypto products. Such regional regulatory competition will ultimately benefit investors by offering more diverse and compliant crypto exposure options.

For Bitcoin-themed stocks like MicroStrategy, this development presents both challenges and opportunities. Challenges include the diversion of some investment demand into compliant funds; opportunities stem from overall market expansion, potentially bringing more capital into the crypto space. The key question is whether MicroStrategy can adapt, evolving from a simple Bitcoin holding vehicle into a platform offering more value-added financial services.