Brits are Turning to Bitcoin as the Pound Plummets Against the US Dollar
Bitcoin (BTC) has been winning the attention of British investors amid a plunge in the price of the British pound (GBP) against the dollar (USD).
Data first pointed out by James Butterfill, head of research at Europe's largest digital asset investment firm CoinShares, indicates that Bitcoin trading volumes have seen an explosion against GBP in the last few days.
Per the data, Bitcoin volumes against GBP rose over 1,400% on September 27, going from an average of $70 million to $881 million. In contrast, trading volumes against other currency pairs such as the dollar, the dollar-pegged stablecoin USDT, and the euro were more modest on the day.
According to Butterfill, the data points to the trend of investors favoring Bitcoin when a fiat currency is threatened.
His remark is in reference to observations from the past where currency meltdowns have been followed by citizens of the country seeking stability in Bitcoin and the broader crypto markets. The trend has been noted in countries like Turkey, Venezuela, Argentina, and even Nigeria, where citizens crypto adoption seems to be on the rise.
The British pound collapse and Bitcoin's price performance
According to a CNBC report, the pound sterling plunge was brought on by the U.K. government's announcement of a radical economic plan in a bid to boost the growth of the economy. According to analysts, the plan, which includes tax cuts, "spooked" investors causing GBP to fall around 3.5% against the dollar.
The fall is the closest GBP has come to dollar parity since 1985. While Britain's new prime minister Liz Truss prepares measures to address the situation, the Bank of England (BoE) has warned that the British economy is likely already in a recession, according to the report.
Meanwhile, Bloomberg notes that the fall not only had an impact on investors but has likely also dented the U.K. government's reputation internationally. According to Bloomberg analysts, the "self-inflicted financial crisis" now has international players worried about Britain's ability to pay its debts. They add that homeowners and businesses will likely bear the brunt of the distrust.
The price of Bitcoin (BTC) has been responding positively to the frenzied British investors. BTC is changing hands at around $19,400, up 2.19% in the last 24 hours and 1.5% for the week after reaching a weekly high of $20,346, as per data from CryptoRank.