Top Fiat Currencies Used to Trade Bitcoin

Bitcoins can be earned either by mining them or receiving them as payment for providing goods or services—or by exchanging them against fiat currencies (such as the U.S. dollar or the Japanese yen), or against other cryptocurrencies.

Who Buys Bitcoin?

Rapidly changing Bitcoin valuations have fueled a high volume of speculative trading activity around the globe. Many people who trust blockchain technology and the monetary ecosystem based on Bitcoin are purchasing virtual currency as long-term investments.

If Bitcoin is increasingly accepted by all genres of businesses—from local coffee shops to large corporations—that could help fuel the adoption of it as a virtual currency. Before making a purchase, some people may compare whether they are better off paying for an item in fiat currencies or in Bitcoins.

For others, Bitcoin and other cryptocurrencies are investment assets, similar to a stock or futures contract. They purchase these currencies with their local fiat currency just as they would buy shares through a brokerage.

Top Fiat Currencies for Bitcoin Trades

Coinhills provides a list of the most traded national currencies for trading Bitcoin-based on information from currencies, markets, and exchanges registered at Coinhills. The data below is as of March 29, 2023.

1. U.S. Dollar (USD)

The American dollar currently ranks first on the list of fiat currencies trading Bitcoins, with around 85.4% of the market share. The consistent top rank of the U.S. dollar in Bitcoin dealing is because of several factors.

A quick adopter of any new technology, the U.S. found a large user base in the blockchain-based Bitcoin, which quickly gained traction in the country. Meanwhile, many other nations and their regulators were slow to embrace the development of Bitcoin. For example, in populous countries like India, individuals who are holding bitcoins directly or through intermediaries have bought them by first converting the Indian rupees to U.S. dollars and then using the dollars to purchase the bitcoins.

2. Korean Won (KRW)

The South Korean won ranks second, with 5.1% of the market share. This is up from the fourth most-traded in 2021.

The share of KRW in Bitcoin trading declined for a while after 2018 because the country's regulators banned cryptocurrency traders in Korea from using anonymous bank accounts. The country's finance minister at the time, Kim Dong-Yeon, mentioned that “there is no intention to ban or suppress cryptocurrency (market)." In 2020, Korea became one of the first countries to pass comprehensive cryptocurrency laws.

When Bitcoin prices surged in 2021, however, about 10% of the population invested in cryptocurrencies. However, though they are a popular investment, Bitcoin and other cryptocurrencies are not treated as legal tender in South Korea.

3. Japanese Yen (JPY)

With a nearly 4% market share, the Japanese yen comes in third when used for dealing in Bitcoin. Japan was previously the leader for many years thanks to multiple bans imposed by the Chinese government on China-based Bitcoin exchanges since September 2017. All those Bitcoin trading activities from China swiftly moved abroad, benefiting Japan the most.

Japanese regulators were also some of the earliest adopters and among the most accommodating of the virtual currency. They have been very proactive in putting up the necessary regulations and have promptly streamlined Bitcoin trading, enabling it to gain a large share of the global market.

4. Euro (EUR)

The currency of Europe, the Euro, ranks fourth on the list with a 2.9% market share in trading Bitcoin. Part of what hinders the Euro's growth when it comes to buying Bitcoin is that it remains confined to certain regions. The German city of Berlin has been welcoming to Bitcoin, with the Netherlands and Belgium also serving as important hubs for cryptocurrency.

No Chinese Yuan

Interestingly, the Chinese yuan no longer figures into the list of top fiat currencies used to trade Bitcoins. In 2014 and 2015, as the Chinese yuan was devalued, it surged to the top rank, beating both the Japanese yen and the U.S. dollar. It maintained its lead until late 2017. However, amid increasing state-imposed regulations and crackdown on illegal Bitcoin trade, the dealings have rapidly moved to other venues, including Japan and Hong Kong, leaving the yuan out of the top list. As of March 2023, it ranked 44th, with a 0% market share.

The Bottom Line

While new Bitcoins are created through mining, existing ones can be purchased by using fiat currencies on a cryptocurrency exchange. The most-traded national currencies for Bitcoin are the U.S. dollar, the South Korean won, the Japanese yen, and the European Union's euro. Due to government regulations, the Chinese yuan holds 0% of the market share of currencies traded for Bitcoin.

Investing in cryptocurrencies and other initial coin offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Because each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.