Bitcoin and British Pound Trading Volume Soars 1,150% as UK Currency Risks Dollar Parity

Bitcoin (BTC) will see increased interest from the UK “very quickly” as fiat currency volatility makes BTC look like a stablecoin.

That’s the conclusion of Gabor Gurbacs, strategy advisor to investment giant VanEck, who was one of many report Bitcoin’s call on the pound this week.

UK Becomes Fertile Ground for Bitcoin’s ‘Orange Pill’

While the US dollar is unleashed, its strength has come at the expense of trading partner currencies, including the euro, pound and Japanese yen.

The pound’s disintegration accelerated this week as GBP/USD hit an all-time low near $1.03.

While the UK’s central bank, the Bank of England, has so far avoided intervention, nervousness is showing as purchasing power is hit doubly hard by the weak currency and inflation at its peak. highest level in 4 years.

“The UK will turn orange very quickly given the volatility of the pound,” Gurbacs predicted.

“Given that the UK is now outside the bureaucratic machinery of the EU, it will have another chance to become a Bitcoin hub. I think UK leaders will use this opportunity reasonably well.

The pound is down almost 25% since the start of the year at one point in dollar terms. While data from Cointelegraph Markets Pro and TradingView shows Bitcoin beating it 56%, the longer the time horizon, the more attractive a BTC hedge becomes.

“Over the past four years, the dollar has crashed -67% in USD gains,” said Michael Saylor, executive chairman and former CEO of MicroStrategy, Noted in its own assessment of fiat currency losses on September 26.

BTC/USD chart against GBP/USD. Source: Trading View

According According to data from CoinShares Head of Research James Butterfill, trading volume for the GBP/BTC pair on the Bitstamp and Bitfinex exchanges, worth a combined $70 million per day, reached $881 million. on September 26, an increase of more than 1,150%.

Butterfill argued that this showed that “when a FIAT currency is threatened, investors start to favor Bitcoin.”

ReactSaifedean Ammous, author of the popular book The Bitcoin Standardcalled the phenomenon “fascinating”.

GBP/USD trading volume on Bitstamp, Bitfinex chart. Source: James Butterfill/Twitter

G20 “begins to understand” the need for BTC hedging

Gurbacs, meanwhile, acknowledged that while he “might be too optimistic about the UK,” G20 countries could still enact a major policy shift towards accepting BTC.

Related: Bitcoin Gains 5% to Reclaim $20,000, September’s First “Green” Eyes Since 2016

“Like gold, Bitcoin could be a hedge against their own policies. Which is worth a small percentage of allocation and support,” he continued.

“Some are starting to understand that.”

Looking beyond the pound, the data shows that major fiat currencies are suffering more from the surge in the greenback than those in emerging markets (EM).

“The tables have turned,” said Robin Brooks, chief economist at the Institute of International Finance, declared this week.

“Since the beginning of the year, emerging markets such as Brazil and Mexico have outperformed G10 currencies against the dollar. This is a major pivot in global markets that is unprecedented. Monetary policy in emerging markets today is more orthodox than in advanced economies. Well done EM…”

An accompanying chart from Bloomberg showed the Brazilian real and Mexican peso even gaining against the dollar in 2022.

The pound brought up the rear with the yen, while the Russian ruble was notoriously absent, having reached its highest in dollar terms since 2015.

Yield of the Fiat currency against the US dollar as of September 26. Source: Robin Brooks/Twitter

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

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