Is it Bitcoin’s time to shine? British pound drops to all-time low against the dollar

The announcement of further tax cuts and debt increases to reduce the effects of an economic recession resulted in the British pound hitting a record low of 26.9 against the U.S. Dollar on Sept. 26. This volatility is simply due to investors’ concerns about the government’s ability to withstand rising living costs in the region.

As investors seek refuge in the world’s largest economy, the U.S. Dollar has been the clear winner. However, the weakness of the British pound could be a positive for Bitcoin. GBP (or the British Pound) is the oldest currency in existence and has been in continuous usage since its inception.

Fiat currencies are 52-years old.

As we know, the British pound began its journey in 1971, after its conversion with gold or an equivalent was ended. The Bank of England has never fixed the value of the currency it issues.

After central banks increased liquidity to the markets in the past two years to stimulate economies, inflation has been a focal point of economic debates throughout 2022. In August 2022, consumers in the United Kingdom experienced a 9.9% increase in prices than the previous year.

The government announced a record-breaking tax cut on Sept. 22. This was the largest since 1972. The British pound fell to $1.038 per dollar intraday, against the U.S. Dollar on Sept. 26. Analysts predicted that the government would issue more bonds to cover the lower tax. Interest rates would need to be increased aggressively.

The GBP’s decline in value is alarming, but it is important to analyze how important the global currency market is and how the British Pound is relative to cryptocurrencies. This is the easiest part. It depends on whether bank deposits, savings, and certificates of deposit are included. The pound sterling was GBP 1.05 trillion in June 2022 if we use the base money definition. This only measures circulating cash and deposits to the central bank.

The U.K. currency is roughly 4% of the $28.2 trillion global fiat base money. It represents approximately $1.11 trillion. The euro, which is the unification currency of all the eurozone countries, ranks first with $6 trillion. It is closely followed by $5.5 trillion by the U.S. Dollar. The GBP’s importance is high due to the region’s $3.19 Trillion gross domestic product in 2021 which was the fifth largest in the entire world.

The British government decided in October 1990 to pair the GBP with the Deutsche Mark, as Germany was the dominant economic force in the area. The exchange rate was unsustainable, and the country had to pull out of the pairing in September 1992 due to Britain’s poor financial performance. The result was that the interest rates went up from 10% to 15% during “Black Wednesday” and the GBP currency lost 25% overnight.

Related: GBP follows the euro; The pound dollar rate reaches an all-time low

Crypto could shine because of supply caps and scarcity

In terms of relevancy, very few assets can match fiat money. The most valuable asset is gold, which has a value of $6 trillion, exempting jewelry and other non-financial assets. Apple, the tech giant, is also leading the stock market valuation, with a capitalization of $2.45 trillion. Saudi Aramco, an oil producer, is second at $2 trillion.

It is difficult to estimate the impact of the British Pound on cryptocurrency. However, Nomics data shows that the U.S. Dollar is the absolute leader in global Bitcoin fiat trading with 89%. Next is 4% from Japan, 3% from the Euro and 2% from the Sterling.

Although the impact on Bitcoin trading is not significant, it could be a game changer for cryptocurrency traders if the oldest fiat currency reaches an all-time low against US dollars.

Porkopolis Economics reports that the average issuance rate for the pound sterling over the past 70 years has been 11.2%. This compares directly to Bitcoin’s daily issuance of 900 coin or 1.7% annually.

The benefits of a decentralized money system could be obvious once the public realizes that their savings and investments have been devalued more aggressively through central bank stimulus measures. The U.S. Dollar has won the race, with its highest level in 20 years, compared to all other fiat currencies.

com. You should do your research before making any investment or trading decision.
https://cointelegraph.com/news/is-it-bitcoin-s-time-to-shine-british-pound-drops-to-all-time-low-against-the-dollar

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Donna Burk

Donna Burk– Business News My Name is Donna Burk and I am also the main source from the ‘Dailynewssheet.com’ of all the exclusive and most delicate visualization of the activities in the business sector. My first step towards this journey was taken in the very early years of my life. I started with an independent financial consultant. However, I only had almost 4 years of skills and experience in this market. I have always been a free personality and like to fly one place to another, to explore more and more. Moreover, this passion and craze of traveling gave me a chance to report a section for best news associations. Last but not least, I am presently working full-time as an editor.

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