In the spring of 2019, we saw the end of the so-called “crypto winter”. When the price of bitcoin broke the $5,000 mark in early April and peaked at $13,000 in June. Although the altcoin market is still struggling to recover. Bitcoin has consistently managed to attract profit-hungry investors again, and subsequently, it bounced back below $10,000 in the third quarter of 2019.
In this article, we analyzed peer-to-peer (P2P) bitcoin trading activity and gained insight into the performance of global bitcoin trading as cryptocurrency exchanges grew in total trading volume over the past twelve months.
Daily Bitcoin trading volume on exchanges: 2018 to 2019
Decentralized peer-to-peer transactions have started in 2019
The bitcoin analysis for the P2P trading platform Bisq reveals bitcoin transaction data provided by Coin Dance. That more and more bitcoin traders prefer to trade on a private peer-to-peer basis.
Bisq is an open-source, decentralized peer-to-peer trading application that enables individuals around the world to buy and sell bitcoin and other cryptocurrency assets. This is the main difference between Bisque and other major P2P marketplace products. That the transaction application does not require the user to perform an identity verification process, nor is it required to store funds. Furthermore, Bisque is built on Tor to enhance the transaction privacy of its users.
Looking at global transaction data, 2019 was the best year for Bisque to perform. However, in the previous year, Bisq had the highest trading volume only trading around $3 million in bitcoin a week. Its best trading week in 2019 was more than three times this amount. Overall, Bisq’s transaction volume tripled in 2019 compared to 2018. Which holds a total of 112 million US dollars or about 15,500 bitcoins.
However, Bisq’s trading volume is low compared to other peer-to-peer bitcoin exchanges. It has become a mainstream personal trading platform that nurtures individual privacy and financial sovereignty.
LocalBitcoins is booming in peer-to-peer trading
The leading Helsinki peer-to-peer trading platform in the international market, LocalBitcoins’ trading volume decreased slightly between 2018 and 2019. This can be attributed to the entry of mandatory KYC identity verification processes and increased competition in the market. However, LocalBitcoins still plays an important role among Bitcoin traders in emerging markets. Those who are suffering from the economic downturn, and there are no reliable local exchanges in emerging markets.
In Argentina, Colombia, Egypt, India, Kazakhstan, Kenya, Mexico, Peru, South Africa, and Venezuela, LocalBitcoins’ transaction volume has reached record highs. Most of which are countries suffering from economic difficulties in 2019. In addition to the popular cash payment option and KYC authentication measures, LocalBitcoins still has USD 2.5 billion or approximately 346,000 bitcoins traded through its platform.
To some extent, it supports this theory. That in countries with weak currencies and dire economic prospects, bitcoin can serve both as a store of value and as a currency substitute. Furthermore, LocalBitcoins transaction data shows that emerging markets have been the main driving force of peer-to-peer bitcoin transactions over the past twelve months, with more and more people opening bitcoin accounts in these regions.
Paxful’s best trading volume year
Since the launch of the American peer-to-peer bitcoin exchange Paxful in 2015, it has had the best trading volume ever. According to transaction volume data from Coin Dance, Paxful has seen a steady increase in its trading volume over the past twelve months.
Similar to LocalBitcoins, the majority of transaction activity in the peer-to-peer market comes from emerging markets including China, India, Kenya, the Philippines, and the United Arab Emirates. In addition, the company said Nigeria and Ghana are its two biggest markets.
However, it is worth noting that Paxful’s trading volume has also increased in developed countries such as Australia, Europe, the United Kingdom, and the United States. Over the past twelve months, Paxful users’ digital currency transaction volume has exceeded US$1 billion, or approximately 138,500 bitcoins.
Is peer-to-peer trading expected to rise in 2020?
In the wake of the tightening of cryptocurrency regulations in several jurisdictions, which has resulted in mandatory KYC for exchanges providing services in the United States. We can expect peer-to-peer bitcoin transactions to continue over the next twelve months.
In countries that still effectively operate under local regulatory frameworks. Peer-to-peer markets have become one of the most popular alternatives to trading platforms. Furthermore, in the bitcoin trading market in a prohibited or legal gray area, peer-to-peer trading platforms enable individuals to exercise their financial sovereignty.
As centralized bitcoin exchanges continue to meet the KYC requirements imposed by the regulators. We can see exchanges switching to peer-to-peer exchanges like Biscay. Which has little or no authentication requirements for bitcoin merchants. Or are less rigid but more privacy-conscious. Markets, given that privacy is becoming more and more important in the digital age, this trend may prevail in 2020.