Bitcoin Pound Sterling Volume Soars To ATH Amid Currency Crisis
October 05 2022 - 2:53AM
NEWSBTC
The pound sterling is experiencing heavy turbulence. The dollar is
eating it all. Bitcoin is in a deep slumber. What a time to be
alive! Things are moving and shaking in the finance world and the
general population can’t do much but watch the show. And place
their bets. British people recently saw the pound sterling and the
euro sink to all-time lows against the dollar. A percentage of the
population reacted by acquiring bitcoin, the charts show. Related
Reading: Bitcoin (BTC) Dips Below $40,000 Over Ukraine And
Possibility Of Fed Rate Hike Another important factor is that the
pound sterling’s “volatility last week was highly unusual, creating
opportunities and price discrepancies.” The currency crisis created
potential possibilities, and British traders seem to have taken
advantage of them. As a reminder, the pound sterling saw “a feisty
week in the UK pending proposed and later abandoned tax cuts.” This
is all according to Arcane Research’s The Weekly Update. In
Bitcoinist’s first report on the situation, our sister site said:
“The UK’s interest in Bitcoin (BTC) will expand “quite quickly” as
fiat currency instability makes the flagship digital currency asset
resemble a stablecoin, analysts said. As one of several this week
to highlight BTC’s attractiveness over the pound sterling, strategy
adviser at financial firm VanEck Gabor Gurbacs came to that
decision. “Because of the instability of the pound,” Gurbacs
warned, “the United Kingdom will get orange-pilled very rapidly.”
The last factor to analyze is this one, “most of the growth was
concentrated in spiking volumes on Bitfinex.” Why was that? Keep
reading to find out. By The Numbers: The Pound Sterling ’s Busy
Week The headline is this one: the BTCGBP trading volume’s 7-day
average reached an all-time high this week. Also, surprising no
one, “similar tendencies occurred in ETHGBP.” How high was the
all-time high, though? Back to The Weekly Update, “BTCGBP pairs saw
trading volumes climbing above 47,000 BTC last Monday, after having
experienced growth throughout the latter parts of September.”
BTCGBP Trading Volume (7d Moving Average) | Source: The Weekly
Update As for the reason for the pound sterling to bitcoin
movements, Arcane Research’s analysts blame it on “market maker
rebalancing.” Although they also recognize that bitcoin is “gaining
mind share amidst declining trust in the British Pound.” A similar
thing happened to the Russian ruble at the beginning of the
conflict with Ukraine. At the time, our sister site Bitcoinist
reported: “The new all-time high on the BTCRUB pair is the result
of the Russian ruble falling more than 50% against the United
States dollar since the start of the year. As the global reserve
currency, most financial assets are priced in USD.” Will the pound
sterling rebound as fast as the ruble did? Or will the dollar
continue to dominate for the foreseeable future? BTC price chart
for 10/05/2022 on Gemini | Source: BTC/GBP on TradingView.com Why
Was Most Of The Growth On Bitfinex? The analysts at Arcane Research
identified another fascinating factor. An incentive, if you will.
They named it a “prolonged structural mispricing” and it refers to
a “dollar-adjusted premium or discount in Bitfinex’s BTCGBP pair
last week.” All you have to do is adjust “the BTCGBP pair to USD,”
to see that the pound sterling / bitcoin pair “traded at a
significant discount to dollar spot.” This was an effect and not a
cause. The market movements created this arbitrage opportunity.
People who detected the incentive on time, profited. Related
Reading: Bitcoin Shows Resilience In Dollar-Driven Bloodbath |
BTCUSD September 26, 2022 “As the GBP bottomed vs. the USD, BTCGBP
traded at a massive discount compared to BTCUSD. The discount
turned into a prolonged premium with certain wicks deep into
discount terrains as GBP traded in a highly volatile environment.”
Despite the significance of this factor, Arcane Research still
believes that “the predominant force was market makers reducing
their exposure” to the pound sterling. Featured Image by Ewan
Kennedy on Unsplash | Charts by TradingView and The Weekly Update
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