JPY and USD Account for the Overwhelming Majority of Bitcoin to Fiat Trades
To see which markets are active in cryptocurrency trading, LongHash looked at the national currencies most exchanged for Bitcoin over the last 24 hours.
JPY was used more than USD, and together they accounted for 93.95%
As of February 6 at 11 am UTC, Coinhills.com projected that the total volume of Bitcoin (BTC) exchanged for national currencies in the last day was around 726,704 BTC.
The site reported that the currency most traded for Bitcoin during this period was the Japanese yen (JPY). It accounted for 48.49% of the total Bitcoin volume that Coinhills says was traded with fiat currencies.
In 2017, Japan was at the center of the Bitcoin universe, especially after China cracked down on cryptocurrency exchanges. Then the Japanese cryptocurrency exchange Coincheck was hacked last year, leading to more than $500 million USD worth of losses. As a result, Japanese regulators became much more cautious about crypto.
However, if the Japanese yen is indeed the most popular fiat currency for exchanging Bitcoin, the country’s interest in cryptocurrencies is alive and well.
As for the Japanese yen’s place when it comes to traditional currencies, it is the third most traded on foreign markets, placing behind the US dollar and the euro. The yen is also used as a reserve currency in addition to the US dollar, euro, and British pound.
When it comes to Bitcoin, Coinhills found that the Japanese yen outranked the US dollar, which accounted for 45.46% of the total volume.
It is worth noting that the US dollar is used in far more countries than just the United States. According to WorldData, USD is used as a currency in at least 15 other countries, and many other national currencies have a fixed exchange rate to the US dollar.
In fact, the US dollar makes up nearly 62% of all known central bank foreign exchange reserves, and an estimated 65% of all US bills are used outside the country. This means that the prevalence of US dollars in Bitcoin trading may not directly indicate Bitcoin’s popularity in the United States.
Additionally, one factor that could contribute to how often US dollars are used to trade with Bitcoin could relate to the currency’s prevalence in foreign markets. In countries like Venezuela, where national currencies suffered severe inflation, citizens largely rely on external currencies like the US dollar or cryptocurrencies like Bitcoin as a medium of exchange.
All other national currencies accounted for just 6.05%
No other national currency came close to the same volume as the Japanese yen or US dollar when it came to Bitcoin trades in the last 24 hours.
Combined, all other national currencies accounted for an estimated 43,934 BTC of the 726,704 BTC total volume at press time. This means that more than 70 fiat currencies accounted for just 6.05%.
Outside of these two currencies, the euro was most commonly used to purchase Bitcoin, accounting for 1.71% of the total volume. It fared slightly better than the Korean won, which accounted for 1.56%.
In fifth place, the Turkish lira outranked the British pound, but not by much. It represented 0.8% of Coinhills’ findings, while the British pound accounted for 0.77%.
The Turkish lira's place as a relatively common trading pair for Bitcoin could be partially related to country’s recent inflation rate. According to Bloomberg, the lira dropped 28% against the US dollar last year. Much in the same way that markets like Venezuela are turning to crypto, some portion of the Turkish public could be following suit.
Ultimately, when it comes to the currencies that serve as a gateway between crypto and fiat, the dominance of the Japanese yen and US dollar look untouchable at the current point in time.