Sterling depreciation drives Brits to Bitcoin

Sterling investors turn to Bitcoin, fleeing the uncertainties in the UK.

After the UK's short-term Prime Minister Liz Truss unsettled financial markets by announcing her mini-budget on September 23, some investors turned away from sterling and turned to cryptocurrency. According to data from research firm CryptoCompare, trading volumes between Bitcoin and sterling rose 233% in September compared to the previous month. The cryptocurrency's trading volume against the euro similarly increased by 68%. "This is the first time we have seen such a large increase in Bitcoin volumes against a developed country's currency," said Tyr Capital analyst Ed Hindi. Analysts also noted that the trading volume between Bitcoin and sterling rose to a daily record high of £846 million ($955 million) on Monday, following the announcement of the fiscal plan on September 23. This comes at a time when Bitcoin's volatility is near its lowest levels all year. According to Refinitiv data, the volatility of both Bitcoin and US 10-year bonds currently stands at 21, while at the beginning of September, Bitcoin's volatility (65) was more than double the volatility of US bonds (31). Escape from crisis Sterling investors have moved into the cryptocurrency market, as have other investors whose currencies have come under pressure. But recently, as institutional investors have embraced the cryptocurrency market, cryptocurrencies have begun to trade more in line with risky investment vehicles. "Bitcoin has never been seen as a flight to safety from crisis," said Ben McMillan, chief investment officer at IDX Digital Assets. Analysts also attributed the exodus from sterling to investors looking to take advantage of increased arbitrage opportunities due to the volatility in Bitcoin prices. Bitcoin fell to around 17,050 against sterling today, down from a six-week high of around 17,900 on September 28. Bitcoin, the world's largest cryptocurrency, has lost over 68% of its value this year, while gold, a traditional safe investment, has lost 9% and the S&P 500 stock index has lost 16%. Bitcoin has stabilized somewhat in recent weeks, but its price remains at around $19,285. CryptoCompare analysts also noted that trading volumes between Bitcoin and sterling have returned to levels before the fiscal package was announced. Analysts said, "With the reduction of uncertainties in the UK government, sterling has regained strength." analysts made an assessment. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!