The trading volume between Bitcoin and the British Pound jumped 233% in September month-over-month, according to crypto market data provider CryptoCompare. Analysts said one of the factors driving the trend is the convenience of buying bitcoin compared to investing in the FX or gold markets as investors sought a hedge against the falling currency.
Investors Turned to Bitcoin After Sterling’s Decline in September
The transaction volume between the sterling and Bitcoin (BTC) was up 233% in September, compared to the previous month. Similarly, the trading volume between BTC and the euro also soared 68% last month, according to CryptoCompare.
“It was the first time we’ve seen such a huge increase in (bitcoin) volumes for the currency of a developed country.”
– Ed Hindi, Chief Investment Officer at Tyr Capital
The volume spike in the sterling-BTC pair came amid a rough month for the UK markets, with the pound plummeting to an all-time low against the US dollar. The drop occurred after former Prime Minister Liz Truss introduced her mini-budget on Sept. 23, leading to a massive sterling sell-off. Investors shifted their funds to Bitcoin, among other currencies.
Following the havoc caused by the mini-budget, Liz Truss was forced to make a U-turn and scrap a part of her policy. She rapidly lost trust in her own party and resigned after just 44 days in the office, making her the shortest-serving PM ever. She was replaced by Rishi Sunak as UK’s new PM on Oct. 24.
Just days after the mini-budget was unveiled, the transaction volume between BTC and the pound hit a daily record high of 846 million pounds ($955 million), according to Kaiko Research.
Investors Preferred Bitcoin Over Gold and Fiat Due to Crypto Convenience
Bitcoin’s volatility currently stands at its lowest level in 2022, compared to safe-haven U.S. bonds, whose volatility is at its highest point in more than two years. Moreover, U.S. Treasuries have been more volatile than the leading cryptocurrency over the past month.
Analysts said one of the reasons why investors turned to Bitcoin is the ease with which they can buy the cryptocurrency, compared to investing in gold or the foreign exchange (FX) market. A similar trend appeared earlier this year when fiat currencies faced pressure following Russia’s invasion of Ukraine, leading many investors toward Bitcoin.
But it is clear that Bitcoin is no safe-haven asset either. The cryptocurrency currently trades just above the $19,000 mark, down more than 50% in the past 6 months amid a broader sell-off in the crypto market.
This article originally appeared on The Tokenist
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