Data shows that Bitcoin trading volumes have increased dramatically against the pound in recent days, as first noted by James Butterfill, head of research at Europe’s largest digital asset investing firm CoinShares. British investors are becoming more interested in Bitcoin (BTC) since the value of the pound (GBP) relative to the dollar has fallen (USD).
From an average of $70 million to $881 million as of September 27, Bitcoin volumes versus the pound increased by more than 1400%. In contrast, trade volumes on the day were lower against other currency pairs like the dollar, euro and the dollar-pegged stablecoin USDT.
Many analysts attribute the sterling’s decline to the U.K. government’s announcement of a radical economic plan that includes significant tax cuts for the wealthy and middle class. As the UK confronts record-high inflation rates, tax cuts have reportedly “spooked” investors. The pound decreased by roughly 3.5% in value when compared to the dollar and is now trading at about 0.90 GBP/USD.
Liz Truss, the newly elected prime minister of the UK, defended her choice to enact the tax cuts by claiming that it will act as a catalyst to boost economic growth and that she doesn’t want a Briton to pay more than $2500 annually for gas.
When a fiat currency is in danger, investors tend to embrace Bitcoin, according to Butterfill’s analysis of the data. His comment refers to historical observations that currency collapses have been followed by locals looking for stability in Bitcoin and the wider crypto markets. Countries, where cryptocurrency acceptance appears to be increasing, include Turkey, Argentina, and Nigeria.
In addition to having an effect on investors, the decline in the value of the pound has probably hurt the image of the British government globally. Bloomberg analysts claim that international players are now concerned about Britain’s capacity to pay its obligations as a result of the country’s “self-inflicted financial crisis.” They also say that employers and homeowners will probably be the primary victims of the hostility.
British investors are to be partly thanked for the increase in the price of Bitcoin (BTC).
BTC is currently up 3.80% over the previous five days, trading at around $19,518.40. It’s interesting to note that over the last week, Bitcoin outperformed the most important foreign currencies, such as the Chinese yuan and the Euro, which declined by -2.2% and -3.5%, respectively, during the same period.