BTC-pound volume soars to all-time high amid currency turmoil

Bitcoin is showing signs of recovery, registering a 5.3% price pump in the past week to trade at $20,129, according to tracking from CoinGecko at the time of writing.

Here’s a quick look at what’s happened over the past few days:

• British Pound fell to a record low of $1.03 against the USD on September 26, 2022
• BTC/GBP trading volume in Bitfinex and Bitstamp grew by 47,000 BTC
• Bitcoin shows that it can take advantage of the fragility of fiat currencies

The virgin cryptocurrency is not only performing well in terms of price but also with trading volume.

In fact, when the British pound hit a new record low against the US dollar last September 26 at $1.03, BTC/GBP trading pairs across various exchanges became very active, climbing by more than 47,000 BTC.

Bitfinex and Bitstamp, two crypto exchanges where the pair is listed, observed a phenomenal jump in trading volume on the same day, reaching $881 million.

Source: Arcane Research

According to CoinShares Research Head James Butterfill, this value is 12 times greater than the $70 million daily average for the two firms over the past two years.

Bitcoin as a hedge or subject of speculative interest

This latest surge in Bitcoin trading volume has sparked discussions about whether there is now significant hedging demand for the crypto or whether the asset is now subject to speculative interest.

In the face of impressive trading volumes recorded on Bitstamp and Bitfinex following the collapse of the British pound, analysts remain divided on what this means.

Some believe that this may be a result of a significant number of investors now going for the largest cryptocurrency by market capitalization to protect themselves against the decline in value experienced by fiat currencies.

However, others have reasons to believe that this could be caused by traders aiming to cash in on the volatility experienced in the area right now.

A Bitfinex analyst has shared that trading volume growth of this magnitude shows how Bitcoin can take advantage of the “apparent fragility of fiat currencies.”

It’s almost the same thing that happened with the Ukrainian hryvnia and Russian ruble earlier this year.

The collapse of the British pound

At the center of all this is the steep fall in the British pound, which lost 7% of its value against the USD last month.

UK Prime Minister Liz Truss’s proposal for increased government borrowing to tackle tax cuts appears to have sparked fears among investors.

They (investors) believe that such a move could increase the country’s inflation rate, which is almost 10%.

The proposal sparked market reactions in Britain, as the government’s five-year bond rose a full percentage point since Thursday.

By bond market standards, even just a 1% increase is considered a huge move.

BTCGBP pair now trading at 17,649 pounds on the daily chart | Source: TradingView.com

Featured image from Daily Express, Chart: TradingView.com