The pound sterling - regarded as the world's oldest currency still in use since its inception more than a thousand years ago - is almost as volatile as new-comer Bitcoin as of late.
It's been almost a year since Bitcoin hit a record around $68,000. It's now trading at about $19,000. But in comparison, crypto volatility might be way down, prompting warnings from analysts about investor interest in the digital-asset sector. But it's not volatility that matters - it's volumes.
That's according to crypto trading firm Cumberland, which says that volumes, while off the highs of the year, "remain absolutely massive". Roughly $50 billion worth of Bitcoin derivatives - excluding spot and on-chain, as well as non-Bitcoin related activity - are cleared on exchanges each day, prompting the firm to posit that daily activity in crypto may be more than $100 billion, about one-fifth the figure for US stocks.
"This time is different"
"Recent volatility-driven concerns about the health of the crypto space likely stem from comparisons to the bear market of 2018, when volumes were dire," the firm said on Twitter. "This time is different."
Different volatility measures for the crypto space have come way down in recent days as the price of Bitcoin remains stuck in a narrow range around $19,000-$20,000. An index of Bitcoin volatility has dropped to its lowest level of the year.
But the takeaway from this trend shouldn't be that it represents a lack of interest in the digital-assets space, said Cumberland, the crypto offshoot of the Chicago-based trading giant DRW. Such analysis "is deeply problematic" because it "obfuscates the critical difference between trading volumes and price volatility."
Meanwhile, the British pound sank versus the dollar Friday, with investors rattled by political uncertainty following the resignation of UK Prime Minister Liz Truss. Sterling fell 1 per cent in morning London deals before recovering slightly to $1.1129.