July 09, 2020 |James Messi
Top Fiat Currencies Used to Trade Bitcoin
You can get Bitcoin through mining or by getting it as payment for offering products and services. You can also acquire it from exchanging fiat coins such as US dollars and the Japanese Yen.
The history of fiat and BTC
Fiat money got introduced centuries ago in China. People started getting notes in the eleventh century. In the beginning, it got exchanged with silver, gold, or silk. Later, the fiat money system got established.
BTC came about in the eighties. During that time was when the systems supporting the current crypto got created. Its precursor was Bit Gold, which emerged during the late nineties. Bit Gold did not become so popular, but most of its features were similar to those of BTC. The functions included duplication prevention, blockchain, and inbuilt scarcity.
Fiat coins supporting BTC trades
You can gain Bitcoins by exchanging them against several currencies. Below are the top fiat currencies used in trading BTC.
The Japanese currency has a sixty percent market portion, and it is the first fiat coin for exchanging BTC. The dominance got outstretched due to China bans on Chinese BTC exchanges in 2017. All BTC transaction services in China got shifted to Japan.
Japan is very dynamic in regulating and organizing BTC activities, which has made it acquire the most significant percentage of the market. In 2017, the nation got a license for eleven BTC exchanges, offering an enhancer to exchanging BTC.
The US dollar comes second in the list BTC exchanging coins. Its market portion is almost twenty-five percent. The greenback ranked top back in 2012 but came second in 2014.
The dollar has always been consistent because it is quick in adopting new technologies.
The Korean won was ranked third in the BTC exchanging coins list in 2018. Its market portion is 6.5 percent. The percentage has, however, gone down lately. The Korean rule makers also introduced a ban on crypto customers from utilizing unknown banks.
The accounts official in Korea recently stated that crypto would never get banned. The nation’s currency will, therefore, go on doing more transactions.
The European currency comes fourth in the list of fiat coins for exchanging BTC. Its market share is 5.5 percent. The European bank revealed that they do not plan to regulate BTC, thus reducing its value.
The common currency going round in most places in Europe raises concerns. Its popularity in trading Bitcoin is in specific locations. The German city is the BTC capital for Europe.
More coins include:
- GBP (British currency)
- RUB (Russian currency)
- PLN (Polish currency)
- AUD (Australian dollar)
- TRY (Turkish currency)
If combined, The Korean currency, the US dollar, and the Japanese coin make ninety percent of the fiat coins for exchanging BTC globally.
Bitcoin exchanges that support fiat
Bitcoin exchanges are sites that offer a place to buy, sell, or exchange BTC. The leading BTC exchanges include:
1. Beaxy platform
It is the latest generation crypto and digital asset platform, offering customers powerful management tools, top technology, advanced order types, security, and more. The platform provides instant depositing of fiat currency.
The exchange is in Asia. It is accessible to everyone except for people in China and America. Presently depositing and withdrawing fiat is free, and the process happens fast. Also, CEZEK transaction charges are lesser than most exchanges.
Coinbase exchange is also a cryptocurrency wallet. It was created in 2012 and currently has millions of users. The platform is simple to use, and it is available in most nations. Another thing that makes Coinbase stand out is its Global Digital Asset Platform, which operates as a trading place.
The cryptos that you can purchase using fiat funds on this platform include Bitcoin, Ethereum, and Litecoin.
The platform was the first American managed crypto exchange. It offers Ethereum and Bitcoin exchanges. What makes it stand out is its security feature. Fiat money gets stored in banks and gets insured by FDIC. The exchange also keeps most of its Bitcoin and Ethereum in cold storage.
Gemini allows both bank transfers and debit card or credit card transactions. People who place high orders also get discounts on this exchange.
How to trade BTC
Below are the steps followed when trading BTC.
1. Creating an account
You must open a trading account. The process of creating one does not take long.
Remember that unlike when you sell or buy BTC, you will not require an account with a BTC exchange. You will trade on the costs provided. The platform derives from several transactions on behalf of the customers.
2. Create a trading plan
A plan assists in making useful decisions even when stakes are high. Below are the guidelines for planning.
- Determine your goal and break it down to long-term and short-term goals.
- Choose your manageable risks from every trade together with the amount you will be ready to lose overall.
- Select a risk ratio. It will help you determine the profit you require to justify your expected loss.
- Select the markets to trade-in. You can begin with BTC or try others.
Do not start trading without knowing the most recent BTC updates. Research about the currency to get a clue of what its next price will be.
If you wish to analyze how BTC behaves, use charts. Previous data can also help you understand how the market moves. Comparing time frames additionally offers more insights on trends.
Place your trade using the online trading site. To do that, provide the amount you wish to stake. You may even define your closing conditions to stop when the market shifts against you. You can also set a limit for when it shifts to your side. Limits and closings help in managing risks.
Advantages and Bitcoin over fiat coins
BTC has several benefits over fiat coins. Among them are a decentralized system and customer safety.
1. Decentralized system
BTC is famous for being decentralized. The decentralization implies that it does not require a central authority, or a managing body to function.
Fiat has a distributed system and gets run by the state. BTC utilizes nodes that verify transactions that get introduced to the system. The processes remain in a ledger that functions like banking records.
Anybody on the network can see the ledger, but customer details remain private. So, network fraud or breaches get prevented.
2. Safety and privacy
Fiat transactions need private information like name, phone number, and address, and others. BTC transactions are anonymous. Even the individuals you transact with will never get your private details, and neither will you get his. Because of identity protection, many individuals choose to make transactions using Bitcoin.