Bitcoin and British Pound Volumes are up as the British Currency Fluctuates
Trading volumes between the British pound and the cryptocurrency have risen to an all-time high after the pound fell.
Trading volumes between the British pound and the cryptocurrency rose to a record high after the pound fell on Monday, according to market data firm Kaiko Research, in what analysts said was likely to be a rally in trading. assets or leverage arbitrage.
Sterling fell to a record low against the dollar on Monday, after falling the previous Friday after the UK government announced unfunded tax cuts.
Trading volume in the bitcoin-sterling pair on eight major exchanges globally soared to a record 846 million pounds ($920 million) on Monday, according to Kaiko Research, compared to an average of about 54.1 million pounds per day so far. in 2022.
James Butterfield, head of research at cryptocurrency firm CoinShares, said the rally was likely due to traders exchanging British pounds for bitcoin.
“There is a significant correlation with bitcoin volume growth and political/currency instability,” he said.
Butterfly said that there has been a previous spike in crypto trading volumes for other currencies, such as the Russian ruble and Ukrainian hryvnia, but that he has not seen such large movements in the volume of the bitcoin and British pound pair.
Connor Ryder, the research analyst at Kaiko, said the data indicates that the cryptocurrency market has responded to fiat volatility. When the British pound plunged on September 26, “opportunistic investors rushed to crypto exchanges offering BTC-GBP to try to profit by arbitraging any errors in bitcoin prices in major fiat currencies,” he said in an emailed comment.
Cryptocurrency exchange Bitfinex said it saw a “significant increase” in trading volume and activity in bitcoin and the British pound on Monday, which Bitfinex analysts said, “confirmed that the largest cryptocurrency could benefit from an apparent fragility in fiat currencies.”
There is no doubt that cryptocurrencies are very volatile and the price of Bitcoin has fallen significantly so far in 2022 as rising interest rates have prompted investors to dump riskier assets.
Against the dollar, bitcoin is down about 58% since the start of the year, while the British pound is down 20%.
Bitcoin was trading at around $19,515 on Wednesday and 17,940 against the British pound. The cryptocurrency hit a two-week high against the British pound on Tuesday.
(dollar = 0.9195 pounds)
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