The world of finance is constantly changing, going through a rollercoaster of trajectories of surge and fall. Fiat currencies have mostly dominated the global economic landscape along with some asset classes such as gold and silver. But online currency has never really been a part of the winner’s tally!
That was until Bitcoin arrived and completely transformed the game for online currencies. However, one cannot ignore the fact that fiat currencies are an important part of Bitcoin trading as they help close the gap between age-old financial systems and cutting-edge decentralized currencies. Since fiat currencies are government-regulated and hold different values, some fiat currencies can dominate the Bitcoin trading scenario, influencing its price movements, liquidity, growth potential, trading volume, and more.
In this blog, we will check out some of the best fiat currencies for Bitcoin trading, how they possess a dominating influence on Bitcoin, and how their fluctuations can ultimately affect Bitcoin price, both in the short-term and the longer run!
Top Fiat Currencies Dominating Bitcoin Trades
Although most countries around the globe allow individuals to trade in Bitcoin through their fiat currencies, not every currency has been able to build a stronghold over Bitcoin’s trajectory and shape up its price movements and potential future direction.
We have made a list of fiat currencies for Bitcoin trading that both seasoned traders and novices can rely on. These fiat currencies have risen to prominence owing to their higher face value, larger global presence, and wider preference by traders. Our top picks of the best fiat currencies for Bitcoin trading mentioned below. Check them out:
US Dollar (USD)
Being one of the most powerful currencies in the world, it is of no surprise that US Dollar tops the list when it comes to currencies that dominate Bitcoin trading. Based on recent statistics, USD holds roughly 86% market share in terms of Bitcoin trading, proclaiming its unchallenged dominance over the cryptocurrency market as a whole.
USD had a few benefits over most other fiat currencies when it came to influencing Bitcoin trading. Since blockchain technology and Bitcoin were incorporated into the US market from its fetal state, the market had an advantage of early exposure to this token. Other countries were late to being openly accepting of Bitcoin, meaning individuals from these countries purchased BTC by converting their native fiat currency into USD.
USD’s gold-reserve status has also helped the currency establish a stronghold over the growing Bitcoin market and its price movement. Also, the top 1% of BTC traders mostly belong to the US, resulting in higher trade volumes, increased liquidity, and a higher overall dominance. All these factors have come together to ensure that USD takes the cake when it comes to the best fiat currencies in Bitcoin trading.
Euro (EUR)
EUR is another currency that holds a strong dominance over the Bitcoin trading landscape. As of market statistics in 2024, EUR holds about 1.85% of the total Bitcoin market share around the world. This is quite significant when evaluated from a global economic perspective.
Honestly, the Euro’s successful dominance in Bitcoin trading comes from the fact that several countries have come together to participate in these trades actively. Also, it is interesting to note that European countries have far more lenient laws when it comes to cryptocurrency trading which often allows for larger volumes of Bitcoin trades.
Countries such as France, Germany, Spain, Italy, Greece, Switzerland, etc, contribute to the Bitcoin trades and influence its price movement. This is why, if these countries undergo economic uncertainty and the EUR experiences a recession, Bitcoin prices will ultimately be affected as well.
Japanese Yen (JPY)
The Japanese Yen, JPY, is also one of the most dominant fiat currencies when it comes to Bitcoin trading. Japanese Yen is considered to be a pretty dominant fiat currency in the global economy, holding a high value. As per recent statistics, JPY currently holds about 6.15% market share in terms of Bitcoin trading, making it the second most dominant fiat currency in Bitcoin trading.
The biggest reason behind JPY’s growing popularity as a fiat currency in Bitcoin trading is due to the fact that the Chinese government imposed stringent cryptocurrency laws and several bans against Bitcoin trading back in September 2017. Due to this, a large chunk of Asian Bitcoin traders who would previously use the Chinese Yuan had migrated to using the Japanese Yen, making it a dominant cryptocurrency.
Also, Japan has legalized Bitcoin as a valid form of payment, which is just in line with fiat currencies. Due to this, there has been an increased sense of adoption of this digital currency among investors, traders, and crypto whales looking to diversify their investment portfolios.
Owing to this significant influence, Bitcoin’s price can be heavily impacted if the Japanese Yen experiences a shift in its value due to inflation, global economic conditions, or other economic imbalances within the country.
Korean Won (KRW)
When it comes to Asian countries and their fiat currencies dominating the Bitcoin trades, South Korea definitely remains ahead of most countries. The Korean Won (KRW) holds 6.14% of the total Bitcoin market share, swiftly closing the difference between them and the Japanese Yen.
South Korea’s fiat currency is quite dominant in the global economy. Along with that, Korean traders have always shown a keen interest in participating in Bitcoin trades. They have also contributed massively to the overall Bitcoin trading volume.
However, South Korea somehow fell back in the race to dominate fiat currencies in 2018, when the South Korean government came up with stringent cryptocurrency regulations that prohibited any crypto trader in South Korea from utilizing anonymous bank accounts while participating in Bitcoin trades. By 2020, the government also put forth an elaborate cryptocurrency law with several “dos” and “don’ts” for crypto traders.
British Pound (GBP)
The British Pound is another significant contributor that has joined the list of the best fiat currencies for Bitcoin trading in the world. Although Britain has exited from the European Union (EU) and the Euro is no longer a currency in the country, GBP’s value was still higher than most fiat currencies in the world.
Britain has lenient laws for cryptocurrency trading and a huge chunk of the population is keen about participating in the Bitcoin frenzy. Due to this, GBP holds an influential grasp over Bitcoin’s market share, heavily impacting the price ebbs and flows.
As a result, any fluctuation in Britain’s economy, including the recent recession, can impact Bitcoin’s price and cause it to drop sharply. Similarly, a boom in Britain’s economy will cause BTC’s value to spike.
Chinese Yuan (CNY)
Although the Chinese Yuan has made a hefty contribution to Bitcoin’s growth, it can no longer make it to the list of fiat currencies influencing Bitcoin. In 2015, the Chinese Yuan underwent a golden era, staying ahead of the Japanese Yen and even the US dollar when it came to dominating Bitcoin trades.
However, the period of success passed by as the Chinese government implemented strict laws against the trading of cryptocurrencies, including Bitcoin. Since then the Chinese Yuan fell behind as other Asian countries such as Japan and Korea became popular choices for Bitcoin trading among enthusiasts.
Impact of Fiat Currency Movements on Bitcoin Price
As we have already established, fiat currencies play an important role in Bitcon price prediction in trading. However, the movement in price is not as simple as one would think; it can be a complex affair, especially when considering global fiat currency movements and Bitcoin dynamics.
For instance, if a country’s fiat currency’s value increases, Bitcoin may come across deflationary pressure as purchasing Bitcoin would become very expensive for international traders. Similarly, if a currency’s value deflates, Bitcoin will most definitely experience a surge in value as the price drop will make the token more accessible to global players looking for an opportunity to hedge its prices.
This was recently noticed as the UK and Japan went into recession earlier this year. Amidst all the economic pressure, Bitcoin price witnessed a massive surge of 1.5% within that time frame. This goes on to showcase the inverse effect of fiat currency on Bitcoin prices. Also, Bitcoin’s price movement impacts its liquidity, asset class ranking, and volatility percentage.
Another noteworthy impact on Bitcoin prices can be due to a global crisis scenario that has the potential to shatter the world’s economy. A fine example of this can be noted when COVID-19 struck the world. As economic powers like the US were struggling to combat the dollar devaluation, Bitcoin continued to witness impressive spikes in its chart as more investors flocked towards this digital currency as a store of value, affirming their trust in the token.
Conclusion
As BTC continues to rise in prominence, it’s expected that the adoption rates around this token will continue to rise. Currently, some of the most traded national currencies for Bitcoin have taken the top spot in determining Bitcoin’s trading momentum. But, as the global economic landscape continues to evolve and the regulations around cryptocurrency become more lenient around the world, we can expect to witness newer fiat currencies rising and taking the top spot.
As traders and enthusiasts, it is important to understand the relationship between Bitcoin’s price trajectory and the influence of these most traded national currencies for Bitcoin on informed trading decisions and successfully book your profits from trading in Bitcoin!
