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Most Traded Currencies in 2016

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Have you ever wondered which currencies receive the most trading action? The data for the following chart comes from a survey done every three years by the Bank of International Settlements (BIS).

Note that trading volume adds up to 200%, because each currency trade has a pairing.

The Most Traded Currencies in 2016

Chart courtesy of: Datashown

The Chinese yuan is now the 8th most traded currency in the world, for a total share of 4.0%.

That means its share has doubled since the 2013 BIS report:

RankSymbolCurrency2013 Share
1USDU.S. Dollar87.0%
2EUREuro33.4%
3JPYJapanese Yen23.0%
4GBPBritish Pound11.8%
5AUDAustralian Dollar8.6%
6CHFSwiss Franc5.2%
7CADCanadian Dollar4.6%
8MXNMexican Peso2.5%
9CNYChinese Yuan2.2%
10NZDNew Zealand Dollar2.0%

What about Bitcoin?

The BIS is an international financial institution that is owned by the world’s central banks. As a result, something like bitcoin isn’t considered in their triennial reports.

Bitcoin is ending 2016 on a tear, and it will likely finish as the top performing currency of 2016 – a title it would continue to hold from the previous year.

Bitcoin price

Chart courtesy of: BI Intelligence

But what is bitcoin’s trading volume like, relative to other currencies?

Bitcoin: In the last 30 days, about $3 billion of bitcoin has been traded, which averages out to $100 million per day.

Other Currencies: The total amount of forex transactions per day is $5.1 trillion. The estimated daily turnover of just the Chinese yuan is $202 billion per day.

That means that the yuan has approximately 2,000x the volume traded of bitcoin, while total forex is 51,000x the size. In other words, bitcoin has a way to go to become one of the world’s most traded currencies.

Want another look at the size of bitcoin in comparison to other markets? We put together a previous data visualization showing all the world’s money and markets compared against one another.

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Bitcoin

The 4th Bitcoin Halving Explained

We take a deep dive on historical Bitcoin data from Coinmetrics to see what lessons the 3 previous halvings might have for the future.

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Area graph showing the historical price of Bitcoin in USD with a look ahead to the upcoming 4th halving.

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The following content is sponsored by HIVE Digital

The 4th Bitcoin Halving Explained

Sometime in April 2024, the reward that cryptocurrency miners receive for mining bitcoin (BTC) will go from ₿6.25 to ₿3.125, with significant consequences for the world’s most valuable digital currency.

To help understand this quadrennial event, we’ve teamed up with HIVE Digital to take a deep dive on historical bitcoin data from Coinmetrics to see what the three previous halvings might tell us about the fourth.

Bitcoin Explained

But to understand halvings, we first need to take a step back to talk a bit about how the Bitcoin network works.

Unlike fiat currencies like the U.S. dollar or the Chinese yuan that are backed by central banks, cryptocurrencies are supported by an underlying blockchain, which contains a record of every single bitcoin transaction in a public decentralized, distributed ledger. 

When you spend a bitcoin, a digital record of that transaction needs to be validated and added to the blockchain. And this is where miners come in. They legitimize and audit bitcoin transactions, and as a reward, receive bitcoin in payment.

Halvings Explained

Now, quantitative easing notwithstanding, you normally can’t keep printing money forever without running into hyperinflation (think 1920s Germany or 1990s Argentina).

To get around this problem, the Bitcoin network has a pre-programmed upper limit of 21 million, with the reward that miners receive decreasing by half (hence, halving) roughly every four years. 

Line graph of the value of the Bitcoin subsidy against the Bitcoin supply against the 32 pre-programmed halvings showing that as the supply approaches the 21 million limit, the subsidy approaches zero.

When the Bitcoin network first launched, the reward was initially set to ₿50, an amount that was high enough to quickly increase the money supply and incentivize miners to participate in the validation process. On November 28, 2012, that reward decreased by half to ₿25, then to ₿12.5 on July 9, 2016, and on May 11, 2020, to ₿6.25.

The last halving will happen sometime in 2136, with the reward decreasing to ₿0.00000001 or one satoshi, the smallest denomination of bitcoin possible. The last bitcoin will enter circulation four years later, in 2140.

Halvings and Miner Revenue

With the fourth halving just around the corner, some have wondered whether mining will still be sustainable. Modern mining operations today are costly endeavors, often with razor-thin margins, and losing half of one’s revenue overnight would be a nightmare for any business. 

Area graph comparing miner revenue in USD and in Bitcoin, showing that the price of Bitcoin appreciates after each halving.

And if you look at historical miner revenue in bitcoin, you can see quite clearly, the steep drop in revenue after each halving. But what’s interesting, is that if you compare that against the miner revenue in USD, there is a drop there as well, but it recovers soon thereafter as the cryptocurrency appreciates. In other words, a miner may receive less bitcoin, but that bitcoin is worth more.

Halvings Compared

So we know that the network will continue to function after the fourth halving, but what else can we learn from previous halvings? 

If we look at the percent change in market capitalization post-halvings, we can see a bit of a pattern. After both the second and third halvings, market capitalization peaked at around the year-and-half mark. The second-halving peak occurred on day 526 at around $328 billion, an increase of 3,000%, while the third-halving peak came three weeks later on day 547 at over $1.2 trillion, or an increase of just under 700%. 

Line graph comparing the percent change in market capitalization following the second and third halvings, showing that there is a price peak at around 1.5 years post-halving.

The post-first-halving peak happened a bit earlier, at the 372-day mark, but because the peak was so high (over 10,000%!) it is considered an outlier, and omitted to better illustrate the trend.

The 4th Bitcoin Halving Projected?

Because we know that halvings occur every 210,000 blocks and that each block takes around 10 minutes to mine, we have a good idea of when the fourth halving should happen: April 21, 2024. If the next halving follows the same pattern as the previous two, then there could be a market-capitalization peak some time during the third week of October 2025.

And with the price of bitcoin setting new records at time of writing, a lot of people will be watching very closely, indeed.  

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