The trading volume of the BTC/GBP pair has been increasing rapidly as the British pound weakens against US dollars.
Bitfinex data and Bitstamp data show that Monday’s volume was over 1,100% higher than its average.
Are Brits Using Bitcoin?
James Butterfill, Head of Research at CoinShares, shared that the BTC/GBP volume reached $881 million on September 26th. The average daily volume over the past two years is about $70 million.
After the pound dropped from $1.17 to $0.07 in the last month, it is now at risk of a fall to dollar parity with the euro.
Butterfill responded, “Investors start to favor Bitcoin when a FIAT currency threatens.”
Data for other fiat trading pairs was also shared by the researcher. BTC/GBP volumes were over 1400% higher than their annual average, but BTC/USDT volumes were just 58% and BTC/USDT volumes only 32% respectively.
Bitcoin/GBP Trading Volume in USD Source: James Butterfill Head of Research at CoinShares
Bitcoin’s Q3 performance was comparable to the dollar’s, remaining relatively stable while other stocks and commodities plummeted.
Saifedean Ammous, author of The Bitcoin Standard, called the data “fascinating” as a response. Due to its scarcity, the famous Bitcoin book supports Bitcoin’s ability to outcompete fiat currencies. However, central bankers remain opposed to Bitcoin becoming a widely accepted global currency.
The Relationship of Bitcoin and Currencies
Bitcoin traded historically more like a high volatility tech stock. Bitcoin was able to thrive in the low-interest rate environment in 2021 but it crashed in 2022 due to the global hawkish monetary policy.
Contrary to what many BTC bulls believe, cryptocurrency has not seen a sustained and significant price response to the record-breaking inflation in the U.S.
However, other nations have a different story. BTC/TRY rose to new highs last year as the Turkish Lira fell against the dollar.
Similar to the above, Bitcoin-Ruble volume surged in March following Russia’s currency crash in February in response Western sanctions.
Arthur Hayes, a former CEO of BitMEX, predicted that the U.S. would have to lower interest rates as foreign currencies continue to fall against dollars in July. He added that printing money would cause the BTC number to rise.
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