Bitcoin, British Pound trading volume surges 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 stable coin.
That was the conclusion of Gabor Gurbacs, strategy advisor at the investment giant VanEck, one of many flagging Bitcoin’s appeal over the pound this week.
UK becomes breeding ground for Bitcoin ‘orange pill’
As the US dollar surges, its strength has come at the expense of its trading partners’ currencies, particularly the euro, pound and Japanese yen.
However, the pound’s unraveling accelerated this week, as GBP/USD hit a record low of nearly $1.03.
With Britain’s central bank, the Bank of England, avoiding intervention so far, nerves are showing as purchasing power takes a double whammy from currency weakness and inflation at forty-year highs.
“The UK will get orange pills very quickly given GBP volatility,” Gurbacs predicted.
“Given that the UK is now outside the EU’s bureaucratic apparatus, it will have another chance to become a Bitcoin hub. I think UK leaders will use this opportunity reasonably well.”
The pound fell almost 25% so far this year at one point in USD. While Bitcoin beats it by 56%, data from Cointelegraph Markets Pro and TradingView show that the longer the time horizon, the more attractive a BTC hedge becomes.
“Over the past four years, the dollar has collapsed -67% increased USD,” Michael Saylor, former CEO of MicroStrategy, noted in its own assessment of fiat currency losses on Sept. 26.
According to data from CoinShares head of research James Butterfill, trading volume for the GBP/BTC pair on major exchanges Bitstamp and Bitfinex, normally worth a combined $70 million per day, reached a whopping $881 million on September 26 – an increase of over 1,150% .
Butterfill claimed that this showed that “when a FIAT currency is threatened, investors start to favor Bitcoin.”
RespondingSaifedean Ammous, author of the popular book “The Bitcoin Standard,” called the phenomenon “fascinating.”
G20 ‘beginning to understand’ need for BTC hedging
Gurbacs, meanwhile, acknowledged that while he “may be too optimistic about the UK”, the G20 countries may still adopt a major policy shift in relation to BTC acceptance.
Related: Bitcoin Gains 5% to Regain $20K, Eyes First ‘Green’ September Since 2016
“Like gold, Bitcoin can be a hedge against their own policies. Which is worth a small percentage and support,” he continued.
“Someone is starting to understand this.”
Beyond the pound, data shows that it is the major fiat currencies that suffer more at the hands of a rising dollar than those in emerging markets (EM).
“The tables have turned,” Robin Brooks, chief economist at the Institute of International Finance, declared this week.
“Emerging markets such as Brazil and Mexico have outperformed G10 currencies against the dollar so far this year. This is a major turning point in global markets that is unparalleled. Monetary policy in the EC these days is more orthodox than in advanced economies. Well done EC…”
An accompanying chart from Bloomberg showed the Brazilian real and the Mexican peso even gaining on the dollar in 2022.
The pound took up the rear along with the yen, while the Russian ruble was notably absent, having hit its highest against the USD since 2015.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should do your own research when making a decision.
