Bitcoin feeding frenzy being fuelled by 15x leverage, says exchange

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The Japanese exchange at the heart of bitcoin’s recent surge has said its investors are fuelling the cryptocurrency’s feeding frenzy as they buy in with leverage up to 15 times their cash deposit.

Yuzo Kano, bitFlyer’s chief executive, said in an interview with the Financial Times that the liquidity on his Tokyo-based exchange — which has an 80 per cent share of bitcoin trading in Japan and 20-30 per cent of the global market — was deep enough to handle even the biggest market movements.

Bitcoin’s meteoric rise continued to shock markets last week as the currency soared another 50 per cent to hit new highs over $17,000. Wild trading saw different prices around the world: while the price was about $16,000 a bitcoin on Friday afternoon in Tokyo it fell to about $15,000 during the European day.