The US Dollars and not the Japnese Yen is the powerhouse of the Bitcoin Trade. A through research has found the methodological flaws in the widely cited bitcoin trade. It overstates the importance of the Japanese Yen as a trading pair. However, the analysis shows that the US Dollar is leading the trade rather than the Japanese Yen.
Currently, analytics sites CryptoCompare and Coinhills offer a breakdown of bitcoin trading by comparing the currencies. Till now, the statistics presented that Japanese Yen dominated the trade. The problem is that the vast majority of yen-denominated transactions are not “spot” trades of actual bitcoin for yen. Instead, they are derivative products.
To further simplify it, the parties to these transactions are betting on the price of bitcoin, but no bitcoin is actually changing hands. Despite nothing being wrong in it, selectively mixing derivative and spot volumes can paint a misleading picture.
Overall, the comparison is not healthy, since the former includes derivative trades and the latter does not. When correcting for the misclassification, the data compiled depicts a completely different picture altogether in the bitcoin trade.
Nevertheless, Japan remains dominant in the cryptocurrency interest, thanks to the law that recognized Bitcoin as a legal tender. As per the Coin Desk report, mere a five-day period of analysis does not prove completely prove that the US is leading. Saying so, the data now shows the dollar out-trading the yen.
Overall, the inconsistencies of various kind of transactions and the widely different results that are yielded one cannot paint a proper image. To create a more balanced comparison of Bitcoin trading activity, CoinDesk took a snapshot of both the spot market, which excludes all derivative trading.
However, a thorough research indicates that the U.S. dollar dominates worldwide, with the yen a distant second in the bitcoin trade.
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