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Trading Bitcoin on the Street: How’s LocalBitcoins Doing in 2016?

It’s important to remember the part played by over-the-counter (OTC) bitcoin trading platforms like LocalBitcoins — they often reveal interesting things about Bitcoin’s place in the world.

Also read: High Volume Doesn’t Mean Liquidity: New Kaiko BTC Exchange Report

LocalBitcoins Volume Getting Higher

Kaiko tracks data from LocalBitcoins as well as all other exchanges, and we’ve compiled all that information into the first Bitcoin and Ethereum Market Report.

LocalBitcoins (Localbitcoins.com) traded around 27,000 BTC in the last week of May 2016. That’s pretty high, but the all-time record was the first week of October last year when 38,000 bitcoins changed hands.

Since then, fortunes have shifted. Our report looks at the period December 1, 2015, to the end of May this year, so let’s look at that.

Kaiko-LocalBitcoins Global Volumes
Overall Global Trade Volume on LocalBitcoins.com – Kaiko

LocalBitcoins volumes plunged in the last week of December, to just 17,000. That’s not surprising – bitcoin trading probably is not first and foremost on everyone’s mind between Christmas and New Year.

It’s impressive, though, if you compare it to other years: 15,000 BTC for the same week in 2014 and a measly 3,700 BTC in 2013, when the price was coming down from its all-time high.

Since December, things have been healthier for OTC traders. Volumes grew heavily in the new year to 32,000 a week at the beginning of April.

Which Currencies Are Being Used?

Also interesting are our charts showing which local fiat currencies are most popular on LocalBitcoins. Looking at the data at the conclusion of our report, at the end of May, the number one fiat currency is (not surprisingly) the USD with a 44.4% share of trading. But what’s next, and why?

LocalBitcoins Kaiko USD Volumes
USD-BTC Volumes on LocalBitcoins in 1H 2016 – Kaiko

Number two spot goes to the Russian Ruble (RUR) at 19.6%. That’s probably also not surprising. There are no major trading exchanges located in Russia, meaning residents there can’t connect their bank accounts for deposit to and withdrawal from exchanges as easily as those in other parts of the world. The main online option for RUR trading is BTC-e.

There’s also the continued uncertainty over bitcoin’s legal status in Russia. A bill tabled in Russian parliament in January sought to ban bitcoin activity in the country altogether, though that bill was shelved ‘temporarily’ (possibly permanently) in May after criticism from Russia’s own Justice Ministry.

USD-BTC Volumes on LocalBitcoins in 1H 2016 - Kaiko
USD-BTC Volumes on LocalBitcoins in 1H 2016 – Kaiko

Meanwhile, Russians have turned to a more analog, P2P solution in OTC trading. The RUR has grown markedly on LocalBitcoins since the start of 2014 when it accounted for less than 1% of trades.

The last of the ‘Big Three’ fiat currencies is the British Pound (GBP) with 15.6%. It’s possible the UK is currently underserved by existing online bitcoin exchanges, revealing a business opportunity.

Other Fiat Currencies

Given the size of their populations and economies, the two countries punching above their weight in LocalBitcoins trading are South Africa and Australia, which have each had as much as 7.5% share of the market at some times in our reporting period.

What makes bitcoin trading so popular in two of the Southern Hemisphere’s largest economies?

The Chinese renminbi (CNY) is under-represented on LocalBitcoins considering the amount of bitcoin mining and trading that goes on there, though Chinese residents have access to several high-volume exchanges and also use other, China-only OTC platforms to trade off-exchange.

In summary, the Top 10 fiat currencies on LocalBitcoins in the last week of May were: USD (44.4%), RUR (19.6%), GBP (15.6%), EUR (5.4%), AUD (4.7%), SAR (3.8%), CNY (2.2%) Swedish Krona (2.1%) Thai Baht (1.2%) and Canadian dollar (1.1%).

The Kaiko Bitcoin & Ethereum Market Report

Kaiko also supplies charts on bitcoin price and other network statistics for Bitcoin.com. Our Kaiko Bitcoin Price Indices are growing in popularity and use, with their unique calculation formula that takes into account bitcoin exchange order books and market depth, as well as reported volumes.

The Bitcoin and Ethereum Market Report is the first in a series of reports Kaiko is producing to give an accurate, statistics-based overview of the digital currency industry.

The initial report will be available for purchase on the Bitcoin.com Store and on Airex Market from June 15th, covering the period December 1st, 2015 to May31st, 2016.

The report looks at the currency pairs of most interest to the digital currency industry at the time of publication: BTC-USD, BTC-EUR, BTC-CNY, ETH-BTC, and ETH-USD.

All underlying data from the report is also available for purchase, should anyone in the industry wish to re-crunch parts of it.

Author: Pascal Gauthier

Pascal Gauthier CEO Kaiko.comPascal Gaulthier is the CEO of Kaiko, a Bitcoin data company. He founded Kaiko with the firm belief that Bitcoin can only prosper if all users have access to reliable security and useful information.

Pascal first worked in Sales at Kelkoo and then moved to Criteo, a Nasdaq-listed company, as COO. He then worked as entrepreneur-in-residence at Index Ventures in 2014. He currently sits on the boards of Ledger Wallet as well as two promising ad-tech companies, Teads.tv and OpenX.

Have you ever used LocalBitcoins or traded bitcoin in person? Would you like to see more services to make OTC trading easier? 


Images courtesy of LocalBitcoins, Kaiko