Pound sterling has not been so stable lately. Bloomberg reports that the fiat currency is now almost as volatile as bitcoin.
The British pound sterling — in use for more than a millennia — is almost as volatile as new-comer Bitcoin https://t.co/qX8V2KnTXI pic.twitter.com/OM4X8V4iRL
— Bloomberg Crypto (@crypto) October 22, 2022
Volatile currency
The news medium backs up this statement with a chart showing the 30-day volatility of both currencies.
Below you can see the value fluctuation of the British pound against the US dollar (in black) as well as the value fluctuation of bitcoin against the US dollar (in red).
Bitcoin has been the least volatile in recent weeks since 2020. At the same time, pound volatility is shooting up.
There has been turmoil in the UK for several weeks. The arrival and sudden departure of Liz Truss as prime minister and the decisions she made in her 45-day stint as leader are causing considerable volatility in the pound.
In recent weeks, pension funds took the brunt of this, which in turn caused the Bank of England to intervene. After Truss stepped down last week, the value of the pound rose slightly again, but at the same time the turmoil persisted.
It is not yet known how the political soap opera will resolve itself and whether new elections will be needed, for instance.
Over the past year, the pound fell 25% against the dollar, only to rebound slightly by 8% in the past month.
The pound sterling is one of the world’s oldest currencies still in use today. Bitcoin is one of the newest currencies. Both are now (in the short term) almost equally volatile.
It has to be said here: bitcoin has been extremely stable in recent weeks, while the pound is less stable than it has been in previous years. It does not seem to be a new benchmark (for either currency).
Bitcoin was around the record price of $69,000 a year ago, but has descended to a value of under $20,000 each.
