- Price Point: Bitcoin was up 2% on Thursday, following gains in the U.S. stock markets on Wednesday as investors returned to risky assets after the Bank of England said it will intervene in the country's bond market.
- Market Moves: Surging bitcoin-sterling trading volume points to hedging demand for crypto.. Or does it? Omkar Godbole unpacks the debate whether rising BTC/GBP trading volume represents hedging demand or speculative interest.
- Chart of the Day: The U.K. Google search volume for bitcoin remains flat amid heightened volatility in the British pound.
In traditional markets, stock futures are falling in the U.S. as sentiment in the U.K. appears to be weak, a day after the Bank of England stepped in to stabilize bond markets.
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Surging Bitcoin-Sterling Trading Volume Points to Hedging Demand for Crypto, or Does It?
By Omkar Godbole
The bitcoin-British pound (BTC/GBP) pair listed on major cryptocurrency exchanges, including Bitstamp and Bitfinex, is more active than ever. Analysts, however, are divided on whether the surge stems from investors switching to the largest cryptocurrency to protect against the sterling slide or from traders looking to profit from the volatility.
On Monday, the day the pound crashed to a record low $1.035, trading volume in the pair listed on those two exchanges climbed to a record $881 million. That's 12 times the $70 million average daily volume of the past two years, according to data tweeted by James Butterfill, head of research at CoinShares, early this week.
The pound's weakness was prompted by concerns over the U.K.'s fiscal health stemming from the new government's tax-cut plans. This month, the currency has weakened 7% against the dollar, the steepest drop since December 2016.
"An explosion in bitcoin trading against the pound underlines the potential of the biggest cryptocurrency to benefit from an apparent fragility in fiat currencies," analysts at Bitfinex said in an email.
Read the full story here.
Chart of the Day
U.K. Google Search for Bitcoin
By Omkar Godbole
- The U.K. Google search volume for bitcoin remains flat amid heightened volatility in the British pound.
- The lack of interest in the general British populace may be disappointing for a bitcoin proponents anticipating a pickup in the hedging demand for the cryptocurrency.
- Bitcoin believers consider their favorite digital asset an antithesis of fiat currencies.
- Google Search trends are widely used to gauge general or retail interest in trending topics.
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