Many investors are feeling anxious as a result of the recent decline in the value of the pound, and some of them appear to have turned to Bitcoin (BTC) as a safe haven. Particularly on September 26, trade volume on the GBP/BTC exchange practically surged. What does this imply, and will anything similar occur more frequently?
The pound hit a record low.
The British pound, which faces severe medium-term volatility concerns and touched its all-time low last week, was particularly hard affected by the market confluences, falling 9% in 15 days.
On September 26, the GBP/USD exchange rate reached its lowest peak when it hit $1.0350 during the Asian session, evoking memories of the 1985 flash crash. For information’s sake, the average value of GBP has only changed between $1.50 and $2 during the previous 40 years.
As a result, Liz Truss, the next British prime minister, will have to deal with several market uncertainties and comfort her citizens, albeit they no longer appear to have faith in the actions made by their government, as noted by Fiona Cincotta, an analyst at City Index:
Market responses demonstrate that investors no longer trust the government’s strategy, resulting in a degree of volatility that puts the pound on par with several developing market pair currencies.
As a result, some English people are trying to move to another currency, and it appears that Bitcoin (BTC) has become a popular option. GBP/BTC trading volumes have in fact truly soared, as James Butterfill, the director of research at CoinShares, said.
It’s surprising that investors choose this asset above gold, which is still regarded as the gold standard for safe investments but has seen a sharp decline in investor interest, as reported by a Messari analyst:
“’Solid silver in gold’ depreciated during the selloff of the euro on September 13 and the fall of the pound on September 26. »
Trading volumes on the GBP/BTC pair increased by 878.11% during the preceding 30 days. These numbers represent an enormous rise of almost 1,431.76% when compared to the figures from the prior year.
In fact, the volume handled on the same day topped 881 million dollars, compared to an average of about 70 million dollars during the previous two years.