The large portion of the bitcoin to traditional currency conversations are made using the United States dollar. It is, by far, the currency that is most tied to the digital currency. The majority of the information that you will find on the web that discusses the cryptocurrency will directly relate its value to the US dollar, a currency that, even if not the strongest, has been the most influential in the modern world.
Individuals who wish to exchange their United States dollars for bitcoins can do so on a variety of exchanges.
– Coinbase: This exchange also holds the title of being the world’s most popular bitcoin wallet service. Although the exchange now supports eighteen other countries, it has primarily been utilized by individuals in the United States.
– BitStamp: Although this Bitcoin exchange is based out of Slovenia, it mainly offers visitors the opportunity to exchange US dollars for bitcoins. That being said, the website does offer visitors the chance to deposit and withdraw a variety of other currencies, including the EUR, GBP, and CHF. Nevertheless, the exchanges on the site are actually made using bitcoins and US dollars.
– Bitfinex: According to BitcoinCharts.com, this website is the largest USD bitcoin exchange by volume. The website offers a variety of special features for bitcoin traders, including options to short and long trade bitcoins through the Margins page. The site also offers users a cold wallet that secures their bitcoin holdings.
Additionally, individuals who wish to convert their US currency for the cryptocurrency can also do so at certain bitcoin ATMs throughout the country.
According to Bitcoinity.org, the United States dollar was used in 23.46% of all bitcoin to traditional currency exchanges that occurred during the thirty day period that ended on Oct. 20th, 2014. While the United States dollar’s trading volume dwarfs that of the EUR, GBP, and CAD, it is still only slighty more than a third of the Chinese yuan’s trading volume.
Factors Affecting The Close Relationship Between The Two Currencies
The close relationship between the United States dollar and bitcoin can be attributed to a number of factors:
First, most bitcoin exchanges primarily cater to users who will be making exchanges using the United States dollar. The ability to exchange currencies other than the United States dollar for bitcoins is currently quite limited. As a result, individuals who wish to trade for bitcoins must do so using the United States dollar, leading to a higher volume.
Secondly, the United States dollar is one of the most heavily utilized currencies in the world. As detailed by Investopedia, the currency’s stability is a reason why the United States dollar is so heavily used. Not only has the currency never been devalued, but US dollar’s notes have also never been invalidated. As you can imagine, this grants an immense amount of power to the United States. It is for this reason that individuals in other countries have begun to utilize bitcoin in the first place.
Third, the cryptocurrency has gathered quite a bit of media and regulatory attention in the United States. While it is true that the currency’s adoption rate has increased around the world, with countries like Australia discussing regulatory decisions, BitPay, a bitcoin payment facilitator, has gone as far as to sponsor a college football bowl game. This amount of exposure will naturally increase the attention given to the cryptocurrency in the United States.
Fourth, a large number of bitcoin pools are operated out of the United States of America. While individuals in other countries can offer their services in bitcoin mining operations, the fact that the country is so heavily ingrained in the cryptocurrency’s mining options indicates that the loot of the operation may be likely to go to US dollar holders.