Bitcoin-sterling volume surges to record high as British currency falters

LONDON, Sept 28 (Reuters) – Trading volumes between the British pound and cryptocurrency Bitcoin surged to a record high after the pound sterling fell on Monday, according to market data firm Kaiko Research Sterling for the digital asset or profit from arbitrage.

The pound fell to a record low against the dollar on Monday, after plunging earlier Friday after the UK government announced unfunded tax cuts. Continue reading

Transaction volume in the bitcoin-sterling trading pair on eight major exchanges worldwide rose to a record high of 846 million pounds ($920 million) on Monday, according to Kaiko Research, compared to an average of around 54.1 million pounds a day a year so far 2022.

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The surge was likely due to traders exchanging pounds sterling for bitcoin, said James Butterfill, head of research at crypto firm CoinShares.

“There is a high correlation with Bitcoin volume growth and political/monetary instability,” he said.

Butterfill said that there have previously been spikes in the crypto trading volume of other currencies like the Russian ruble and the Ukrainian hryvnia, but that he has never seen such large movements in the volume of the bitcoin-sterling pair.

Conor Ryder, research analyst at Kaiko, said the data suggests that cryptocurrency markets have reacted to volatility in fiat currencies. When sterling plummeted on Sept. 26, “opportunistic investors rushed to crypto exchanges offering BTC-GBP to try to arbitrage a bitcoin mispricing in major fiat currencies,” he said in per comments sent by email.

Crypto exchange Bitfinex said it saw a “significant increase” in volume and trading activity for the bitcoin-sterling pair on Monday, which Bitfinex analysts said “underscored the potential of the largest cryptocurrency, from an apparent fragility of fiat.” currencies to profit”.

Of course, cryptocurrencies are highly volatile and the price of bitcoin has fallen sharply so far in 2022 as rising interest rates caused investors to dump riskier assets. Continue reading

Against the dollar so far this year, bitcoin is down around 58%, while the British pound is down 20%.

Bitcoin was trading 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.

Sterling bitcoin daily trading volume

($1 = 0.9195 pounds)

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Reporting by Elizabeth Howcroft; Edited by Michelle Price and Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.

Elizabeth Howcroft

Thomson Reuters

Covering the intersection of finance and technology, including cryptocurrencies, NFTs, virtual worlds and the money-making Web3.

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