Top Fiat Currencies Used to Trade Bitcoin

Bitcoins can be acquired through mining, received as payment for providing goods or services, exchanged against fiat currencies (such as the U.S. dollar or the Japanese yen), or exchanged against other cryptocurrencies.

Because it has many uses, promises a degree of anonymity, and is more convenient than official currencies in some areas, Bitcoin has spread to many countries. It is exchanged in large volumes in some of them. Here are the top fiat currencies Bitcoin is exchanged for.

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 purchase 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 Bitcoins.

For others, Bitcoin and other cryptocurrencies are investment assets similar to stocks. They can even trade derivatives or buy into exchange-traded funds. Theses investors and traders make purchases 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 17, 2024.

1. U.S. Dollar (USD)

The American dollar currently ranked first on the list of fiat currencies trading Bitcoin, with 71.45% of the market share. The consistent top rank of the U.S. dollar in Bitcoin dealing is due to 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 thems.

2. Korean Won (KRW)

The South Korean won ranked second, with 14.95% of the market share.

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, similar to many other countries, Bitcoin and other cryptocurrencies are not treated as legal tender in South Korea.

3. Japanese Yen (JPY)

With a more than 7% 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 among the earliest adopters and most accommodating of the virtual currency. They have been very proactive in establishing the necessary regulations and 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 3.5% 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, Spain, France, Italy, and Switzerland 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.

The Bottom Line

While new Bitcoins are created through mining, existing ones can be purchased 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. Singapore and the United Kingdom follow these four, with the Chinese yuan and several other countries holding 0% of the market share of currencies traded for Bitcoin due to government regulations.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author does not own cryptocurrency.