Bitcoin trading volume hits 3-month high as investors abandon fiat

Despite Bitcoin (BTC) recording significant corrections in 2022, the asset is witnessing increased investor activity. In this line, Bitcoin’s trading volume has risen steadily as the flagship cryptocurrency appears to meet its expectations of being a safe haven asset in the high inflationary environment. 

In particular, as of September 29, Bitcoin’s trading volume hit its highest level since mid-June to stand at $42.68 billion, on-chain data by Santiment indicates.

Trading volume fails to reflect on BTC’s price

Although Bitcoin trading volume is surging, the activity has failed to reflect on the asset’s price which continues to be outweighed by the prevailing macroeconomic factors like high inflation and increasing interest rates. 

At the same time, most global fiat currencies are stumbling against a rampant United States dollar. Therefore, investors appear to be in a rush to dump the fiat currency with Bitcoin viewed as a hedge. Also, a section of investors are attempting to profit from arbitrage. 

Finbold earlier reported that investors in the United Kingdom and the European Union are selling their pounds (GBP) and euros (EUR) at record numbers to purchase Bitcoin. This is after the pound fell to historic lows triggering a record spike in the GBP/BTC trading volume. 

The Bitcoin trading volume partly complements the asset’s founding principles of thriving in high inflationary conditions. 

It is worth pointing out that if the volume was triggered due to the falling fiat currency values, then investors might not intend to hold the Bitcoin for long. In most cases, when fiat currencies underperform, investors usually turn to cryptocurrencies to buy dollarized assets and bypass the traditional banking system.

Bitcoin’s potential 

Furthermore, the explosion of Bitcoin trading volume against fiat currencies highlights the asset’s potential. Proponents have touted cryptocurrency as a better alternative to fiat currencies and gold due to the limited supply feature. 

In the meantime, Bitcoin is attempting to rally past the crucial $20,000 level. By press time, the cryptocurrency was valued at $19,300 with losses of about 1% in the last 24 hours.

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