Bitcoin-GBP trading volume hits record high

According to market data firm Kaiko Research, the trading volumes between the British pound and the criptocurrency went up to a new record high after sterling dropped on Monday. Analysts said it was likely that investors were rushing 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 bt-sterling trading pair across eight major exchanges jumped to a new record high of 846 million pounds $920 million on Monday, 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 for digital currency.

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

Butterfill said that he had never seen such big moves in the bitcoin-sterling pair's volume, but that spikes 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 Conor Ryder, research analyst at Kaiko. When sterling crashed on September 26, opportunistic investors rushed to the exchanges offering BTC-GBP to try and profit via arbitrage from any mispricing ofbitcoin across the major fiat currencies, he said.

Bitfinex saw a significant spike in volume and trading activity for the pair on Monday, which Bitfinex analysts said underlined the potential of the biggest coin to benefit from the apparent fragility of fiat currencies. In 2022, the price of cryptocurrencies has fallen sharply due to rising interest rates and investors abandoning riskier assets, which is a fact that they are highly volatile.

The British pound has gone down 20% against the dollar, while the bitcoins are down around 58% this year.

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.