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‘British pound now more volatile than bitcoin’, tweets CEO of ShapeShift

By Alara Jordan

Edited by Charlie Mellor

14:55, 26 September 2022

British pound
The GBP/USD pairing recorded a new record low of £1= $1.04 for the first time since 1985 – Photo: Shutterstock

The British pound has witnessed one of its greatest declines after falling to its lowest level recorded against the US dollar since 1985 – prompting one crypto exchange founder to observe volatility is not soley restricted to cryptocurrencies.

On Friday 23 September, the GBP/USD pairing dipped below the $1.10 threshold after witnessing what seemed to be a steady decline in previous weeks.

As of Monday morning, the pound hit a new record low of less than  $1.04, sending trading activity into a flurry in a bid to recover its decline. 

Commentators have weighed in on the collapse of sterling, with several linking the decline to the Conservative Party’s mini-budget announced last week that would see a fresh $45bn tax-cutting package directed at higher earners in the UK.


Declining factors

Before the 2007 financial crisis, the pound held steady at around the $2 mark. In the run up to Brexit, the pound weakened slightly, fluctuating between the $1.50 and $1.70 region.

But the last few weeks have witnessed an extraordinarily quick decline for the currency, plunging to an almost-equal level with the US dollar.  


0.66 Price
-0.610% 1D Chg, %
Long position overnight fee -0.0065%
Short position overnight fee -0.0017%
Overnight fee time 21:00 (UTC)
Spread 0.00006


1.29 Price
+0.220% 1D Chg, %
Long position overnight fee -0.0046%
Short position overnight fee -0.0036%
Overnight fee time 21:00 (UTC)
Spread 0.00013


0.66 Price
-0.610% 1D Chg, %
Long position overnight fee -0.0065%
Short position overnight fee -0.0017%
Overnight fee time 21:00 (UTC)
Spread 0.00006


156.99 Price
-0.310% 1D Chg, %
Long position overnight fee 0.0109%
Short position overnight fee -0.0191%
Overnight fee time 21:00 (UTC)
Spread 0.014


Many believe that one prominent factor is the Conversative Party’s fresh tax cuts that are aimed at diminishing the large payouts for high earners within the UK. Although the mini-budget plan is aimed at alleviating concerns with the rising costs of energy prices and inflation, many commentators believe that the decline signals a greater problem – the markets have a lack of confidence in the UK economy.

Inflation in the UK has also been at record levels, with the figure hitting double digits of 10.1% in July, the first time in 40 years. It has since slipped to 9.9% in August.

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ShapeShift founder and last CEO weighs in 

Erik Voorhees – founder and last CEO of Switzlerand-based crypto exchange ShapeShift which transitioned into a decentralised autonomous organisation (DAO) in December 2021 – took to Twitter to discuss the pound’s downfall, saying the pound is now “more volatile than bitcoin”.

Bitcoin has fallen by more than 45% in value this year, but as of earlier on 26 September it was trading around the $19,100 mark, up around 1.2% in the past 24 hours.

Deputy leader of the UK’s Labour Party Angel Raynor also criticised the Conservative Party on Twitter, stating that the party were “recklessly gambling – not with their own money – but all of ours”.

Markets in this article

1.29335 USD
0.00284 +0.220%

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Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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