The first step to owning cryptocurrency is to know whether you want to mine it or receive it as a form of payment. Receiving BTC is as easy as owning a crypto wallet. You can then exchange the BTC against fiat currencies or other cryptocurrencies.
Luckily, most crypto exchanges allow people to buy Bitcoin or exchange it to fiat currency or other cryptocurrencies easily. When trading BTC, you should consider different factors like ease to deposit that fiat currency, trading fees, tax, and so on.
More importantly, the valuation of Bitcoin to a particular fiat currency is another factor that should be considered. Read on to learn more about the top fiat currencies you can use to trade BTC.
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U.S. Dollar (USD)
On the list of top fiat currencies used for trading Bitcoin, the US dollar ranks at number one for several reasons. First of all, US dollars account for about 85.5% of the market share. This alone should be enough reason you should want to use the US dollar for BTC trading. Moreover, the US quickly adopted cryptocurrency technology. For this reason, several exchanges prefer to deal in US dollars because they have more friendly laws concerning cryptocurrencies.
Unlike other nations with their regulators that made them slow to embrace development in the bitcoin industry. Even to date, in some nations, purchasing cryptocurrencies is illegal. As such, engaging in any cryptocurrency-related transaction could lead to your bank account getting blocked.
A typical example of this is in India. India has not been and is still not a cryptocurrency-friendly nation. If you have an Indian bank account, you cannot buy bitcoin directly with that account. This is because regulators in India have restrictions making it quite difficult to buy bitcoin with rupees. So, if you want to buy bitcoin then you have to first convert your rupees to dollars, then use the dollars to purchase the bitcoin.
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Japanese Yen (JPY)
Next on the list of most popular fiat currencies used to trade BTC, is the Japanese Yen. While the Japanese Yen is not that popular when it comes to trading BTC, they still account for about 5% of the market share. While you may have expected that China would have taken the lead, they aren’t on the list at all for one main reason: the Chinese government. The Chinese government placed multiple bans on everything Bitcoin exchange in 2017.
Following the ban by the Chinese government on China-based Bitcoin exchange, the majority of the Bitcoin trading activity moved abroad. And the closest nation with the technological capacity to handle the market is Japan. Because Japan regulators were earlier adopters of virtual currency, they were able to take a lead on this market.
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Euro (EUR)
Normally, people expect that because the valuation of one euro to a dollar is higher, the euro should be the most preferred fiat currency for trading BTC. This is not so, in fact, the euro accounts for only 4.75% of the market shares. This means that not only do people prefer using the US dollar, they also prefer using the Japanese Yen more than the Euro.
Part of the hindrance the euro is facing for not ranking higher on the list is because when people want to buy bitcoin it is often confined to certain regions. So, it is not that people in the UK don’t want to buy bitcoin, they are only limited by regulators in certain ways. Few regions in the UK like the German city of Berlin and the Netherlands were early adopters of cryptocurrencies
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Korean Won (KRW)
Lastly, we have the Korean Won which ranks fourth on the list of top fiat currencies used to trade BTC. The Korean Won accounts for about 3.2% of the market shares. The reason the Korean Won isn’t the most preferred fiat currency for Bitcoin trading is partly due to the country’s regulators banning cryptocurrency traders from using anonymous bank accounts.
While when you think about this it makes sense for security reasons, but in the long run defeats the whole idea of using cryptocurrencies. Most people use cryptocurrency for the fact that they can run it anonymously. So, rather than compromising on their identity, most people prefer to use another fiat currency, hence the low market shares of the Korean Won.
Conclusion
To sum things up, a nation’s regulation on cryptocurrency has a significant role to play on whether or not its currency is favourable for trading BTC. The US dollar remains the world’s most preferred fiat currency for trading BTC. So, when next you want to buy bitcoin and are having trouble completing it, why not try buying it using US dollars.
