Bitcoin (BTC) will see increased interest from the UK “very quickly” as fiat currency volatility makes BTC look like a stablecoin.
This is the conclusion of Gabor Gurbacs, strategy adviser at investment giant VanEck, one of many who have outstanding the attractiveness of Bitcoin against the pound this week.
UK Becomes Fertile Ground for Bitcoin’s ‘Orange Pill’
As the US dollar has run amok, its strength has come at the expense of its trading partners’ currencies, especially the euro, pound and Japanese yen.
Nevertheless, The pound’s disintegration accelerated this week as the GBP/USD pair hit its lowest level in history at nearly $1.03.
The Bank of England, the UK’s central bank, has so far avoided interventions, but nerves are showing as purchasing power takes a double hit from a weak currency and inflation at forty-year highs.
“The UK will put more interest in bitcoin very quickly, given the volatility of the pound sterling”Gurbacs predicted.
“As the UK is now outside the EU bureaucratic apparatus, it will have another chance to become a Bitcoin hub. I think UK leaders will use this opportunity reasonably well.”
The British pound is down nearly 25% year-to-date in USD terms. While Bitcoin outperforms it by 56%, data from Cointelegraph Markets Pro and TradingView shows that the longer the time horizon, the more attractive it becomes to hedge BTC.
“Over the last four years the dollar has crashed -67% gains in USD”, he pointed Michael Saylor, former CEO of MicroStrategy, in his own assessment of fiat currency losses on September 26.
According to data from the head of research at CoinShares, James Butterfill, GBP/BTC trading volume on major exchanges Bitstamp and Bitfinex, which normally totals $70 million a day, reached a whopping $881 million on September 26, an increase of more than 1,150%.
Butterfill argued that this showed that “when a FIAT currency is threatened, investors start to favor Bitcoin.”
reactingSaifedean Ammous, author of the popular book “The Bitcoin Standard,” called the phenomenon “fascinating.”
G20 “beginning to understand” the need for held BTC
Gurbacs, for his part, he acknowledged that while he “might be overly optimistic about the UK”, the G20 countries could still enact a major policy change regarding BTC acceptance.
“Like gold, Bitcoin could be a hedge against its own policies. Which is worth a small % allocation and support,” he continued.
“Some are beginning to understand this.”
Beyond the pound the data shows that it is major fiat currencies that are suffering more at the hands of a rising greenback than those of emerging markets (EMs).
“The tables have turned” declared this week Robin Brooks, chief economist at the Institute of International Finance.
“Emerging markets like Brazil and Mexico are outperforming G10 currencies against the dollar so far this year. This is a huge turnaround in global markets that is unprecedented. Emerging market monetary policy is currently more orthodox than that of advanced economies. Well done EM…”
An accompanying chart from Bloomberg shows the Brazilian real and Mexican peso even gaining ground against the dollar in 2022.
The British pound trailed behind along with the yen, while the Russian ruble was notably absent, having reached its highest dollar value since 2015.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Each investment and commercial movement involves risk, you must do your own research when making a decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.