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The trading volume of Bitcoin (BTC) against the British Pound (GBP) has hit a new high. Earlier on Tuesday, the pound fell. The result has marketers speculating: are investors trying to dump the pound in exchange for bitcoin, or to profit from arbitrage?
Bitcoin strong, pound weak
The British pound hit an all-time low against the US dollar after the UK government announced unfunded tax cuts the previous week, according to Kaiko Research Team.
The increasing trading volume of BTC/GBP shows that the main framework is appreciated by investors. Data released by CoinShares Research Director James Butterfill indicates that the trading volume of the cryptocurrency pair on exchanges reached an all-time high of $881 million on September 26.
BTC/GBP trading volume was up more than 1,100% from normal on Monday, according to data from Bitstamp and Bitfinex. Average daily activity is around $70 million.
Bitcoin is flexing muscles on UK exchanges
The United Kingdom’s interest in Bitcoin (BTC) will expand “quite quickly” as fiat currency instability turns the flagship digital currency into a stablecoin, analysts say.
VanEck strategy consultant Gabor Gurbacs highlighted BTC’s appeal against sterling this week. He warns:
“Due to the instability of sterling, the UK will turn orange very quickly.”
According to James Butterfill, head of research at cryptocurrency firm CoinShares, the boom is likely due to traders exchanging the pound for BTC.
“Bitcoin volume increases are strongly correlated with political and monetary instability.”
In addition to the British pound, the data shows that the trading volume of other major currencies has increased as well as the cryptocurrency.
Now investors are turning to Bitcoin
Similarly, the amount per euro has increased by 85% in the last month. During the same period, the volume of the USD/BTC pair has increased by 67%. Butterfill explains:
“When fiat currency is threatened, investors start flocking to bitcoin.”
At one point, the British pound fell by almost a quarter against the US dollar. While data from TradingView and Cointelegraph Markets Pro show Bitcoin outperforming fiat currencies by 55%, the longer the term, the more attractive the Bitcoin hedge.
Meanwhile, Bitfinex reported a significant increase in volume and trading activity for the BTC/GBP pair. According to market observers, this highlights the possibility that the main cryptocurrency will benefit from the “apparent weakness of the fiat currency”.
Currently (at the time of writing this article) Bitcoin is trading at $19,584. That’s up 5.7% over the past seven days, data from Coingecko showed on Thursday.
Text credit: Bitcoinist
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