Last Updated: 29 September 2022
Britons are increasingly turning to bitcoin now that the pound is weak. The pound remains weak against the US dollar. It fits a trend of euro and pound trading volumes shooting up. The rising bitcoin pound volume is shown by figures from Coinshares, which has relied on exchange data from Bitfinex and Bitstamp.
This shared head research James Butterfill of Coinshares on Twitter. On 26 September, volume managed to reach a record $881 million. Normally, this is $70 million per day.
— James Butterfill (@jbutterfill) September 27, 2022
Researchers at Coinshares, an investment fund, have calculated that the trading volume of the GBP/BTC pair has increased by a whopping 878 per cent. The volume of other fiat pairs other than the dollar is also rising. Butterfill therefore concludes: ‘As soon as fiat money is threatened, investors seem to prefer bitcoin’.
That UK investors are seeking alternatives is also related to the plans of the brand-new UK prime minister Liz Truss. She plans to increase government borrowing to pay for tax cuts, which experts say will increase inflation. These plans have pushed the pound exchange rate to a low against the dollar and forced the Bank of England to intervene.
British government bond buybacks
Indeed, from Wednesday (yesterday), the central bank started buying up long-term government bonds, intended to calm financial markets, an official press release announced. A weakened pound is putting further pressure on the UK economy, a trend that has started since the brexit. The buyback of government securities will last at least until 14 October. There is also another plan to raise interest rates to bring inflation back to 2 per cent.
With the pound weak and inflation high, citizens are looking for alternatives to their savings. One of the options are crypto currencies, with bitcoin as the flagship currency being the most popular. An earlier report reportedly showed that Britons collectively put £31.7 billion into crypto currencies.