Bitcoin-GBP trading volume hits record high after sterling falls

According to Kaiko Research, trading volumes between the British pound and the digital asset went to a record high after sterling fell on Monday. Analysts said it was a rush by investors to dump their sterling for the digital asset or profit from arbitrage.

The pound fell to a record low against the dollar on Monday after the UK government announced unfunded tax cuts.

The volume of transactions in the bitcoin-steerling trading pair across eight major exchanges soared to a new record high of 846 million pounds $920 million, compared to the average of 54.1 million pounds a day in 2022, according to Kaiko Research.

James Butterfill, head of research at CoinShares, said the surge was likely due to traders swapping sterling forbitcoin.

He said that there is a correlation between volume growth and political monetary instability.

Butterfill said that they had seen such big moves in the bitcoin-sterling pair's volume, but that they have previously occurred in other currencies' trading volumes, such as the Russian ruble and Ukrainian hryvnia.

The data shows that cryptocurrencies markets responded to the volatility in fiat currencies, according to a research analyst at Kaiko. When sterling crashed on Sept. 26, opportunistic investors rushed to BTC-GBP to try and profit from any mispricing of the major fiat currencies, he said in emailed comments.

Bitfinex saw a significant increase in volume and trading activity for the pair on Monday, which Bitfinex analysts said underlined the potential of the biggest coin to benefit from an apparent fragility in fiat currencies. In 2022, the price of cryptocurrencies has fallen sharply due to rising interest rates, leading investors to abandon riskier assets.

It's down 58% against the dollar this year, while the British pound is down 20%.

On Wednesday, it was trading around $19,515 and 17,940 versus the British pound. The criptocurrency hit a two-week high against the British pound on Tuesday.