The following is a direct excerpt from Marty’s Bent Issue 1269: “Interesting reaction outside the UK” Subscribe to the newsletter here.
Here’s a graphic that’s been stuck in my head all week. It was shared by the Coinshares team and highlights the volume of bitcoin trading in the UK earlier this week while the British pound was in freefall. As you can see, volumes exploded to just under $900 million, reaching their highest level in over two years. It is difficult to discern the intent of those who were trading bitcoins in larger sizes in the UK. They could have been people looking to take advantage of rapidly developing arbitrage opportunities, people looking to sell bitcoins for liquidity to service failed transactions, or people looking to buy. bitcoin as a hedge against the currency’s rapid degradation.
We can’t say for sure, but if the volumes were driven by those seeking safety in bitcoin, it would represent a very interesting turning point for the nascent digital monetary asset and how it is being viewed by the broader market. One has to imagine that there are forex traders studying the rapidly degrading fiat currency landscape around the world and starting to panic, especially when currencies like the pound and the yen are reeling in the way that have been for the last few weeks. . Even though the dollar is breaking, it’s the most polished piece of crap in the pile. Their relative strength doesn’t seem so strong when we consider the problems across the US economy: inflation is high, energy policy is suicidal, and rising rates are starting to hit northern consumers hard -Americans, especially homeowners and those with significant amounts of credit.
With all of this in mind, it’s not hard to believe that more and more people are starting to wake up to the fact that bitcoin is a very attractive asset to use as a hedge against this madness. The network is distributed, its supply is finite, and it is easy to own without taking any counterparty risk. Compared to other currencies, bonds and stocks in a world on fire, bitcoin’s superior properties stand out like a sore thumb. Who knows whether or not the UK exchange volume is indicative of a growing recognition of bitcoin’s value proposition, but you should definitely have this potential trend on your radar, especially considering the amount of wealth that is ‘has destroyed so far this year.