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The pound has seen one of its biggest declines after falling to its lowest level against the US dollar since 1985 – prompting a crypto exchange founder to observe that volatility isn’t just confined to crypto -currencies.
On Friday, September 23, GBP/USD broke below the $1.10 level after seeing what appeared to be a steady decline over the previous weeks.
On Monday morning, the pound hit a new all-time high of less than $1.04, sending trading activity into a flurry in a bid to recoup its decline.
Commentators have weighed in on the pound’s collapse, with many linking the decline to the Conservative Party’s mini-budget announced last week that would see a new $45billion tax cut package aimed at high earners in the UK. United.
BTC to USD
Decline factors
Before the financial crisis of 2007, the pound was stable around the 2 dollar mark. As Brexit approached, the pound weakened slightly, hovering between $1.50 and $1.70.
But the past few weeks have seen an extraordinarily rapid decline in the currency, plunging to almost the same level as the US dollar.
https://www.youtube.com/watch?v=pgmdVWPnjt4
Many believe a major factor is the new Conversational Party tax cuts which aim to reduce large payments for high earners in the UK. Although the mini-budget plan aims to ease concerns about rising energy prices and inflation, many commentators believe the drop signals a bigger problem – markets lack confidence in the UK economy.
Inflation in the UK has also reached record highs, with a double digit figure of 10.1% in July, the first time in 40 years. It has since slipped to 9.9% in August.
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The founder and last CEO of ShapeShift intervenes
Erik Voorhees – founder and last CEO of Swiss-based crypto exchange ShapeShift, which became a Decentralized Autonomous Organization (DAO) in December 2021 – took to Twitter to discuss the pound’s fall, saying the The pound is now “more volatile than bitcoin”.
British Pound Now More Volatile Than Bitcoin
— Erik Voorhees (@ErikVoorhees) September 26, 2022
Bitcoin has fallen more than 45% in value this year, but at the start of September 26, it was trading around the $19,100 mark, up about 1.2% in the past 24 hours.
Deputy Leader of the UK Labor Party Angel Raynor also criticized the Conservative Party on Twitter, saying the party was “playing recklessly – not with its own money – but with ours”.
Further reading
