The volume of buy-ins from both the pound and the euro (EURGBP=X) into bitcoin have jumped as the two currencies saw a drop in value against the US dollar.
Investors have various options to secure value as the pound and the euro depreciate and one alternative to investing in US Treasury notes and bonds is to purchase bitcoin.
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However, compared to the strengthening dollar, bitcoin is still volatile and Treasury bonds can be a good investment for those looking for safety and a fixed rate of interest that's paid semiannually until the bond's maturity.
But when investors take in a long-term perspective, bitcoin may seem like a more inviting purchase considering the rising 10-year US Treasury yield, which suggests uncertainty over the dollar in the long term.
People in the UK are striving to protect their wealth by turning to bitcoin as sterling fell 0.8% to $1.08 and the euro weakened 0.6% to $0.98 (EURUSD=X), showing the US dollar has regained its footing, according to data from Messari and Kaiko Research
The volume of transactions in the bitcoin-sterling trading pair across eight major exchanges globally spiked to a record high of £846m on Monday.
This was compared with an average of around £54.1m per day on average throughout 2022.
Watch: 'Bitcoin will eat into global finance until it's $1m per coin' | The Crypto Mile
Sterling fell on Thursday as relief at the Bank of England's intervention in bond markets faded in the face of doubts over the UK government's economic management.
As the Bank of England (BoE) announced its commitment to unlimited bond buying to avert a collapse of UK gilts, Carol Kong, strategist at Commonwealth Bank of Australia, wrote in a note: "The BoE's bond purchases may temper the UK government's borrowing costs but have not resolved the tensions between fiscal loosening and monetary tightening."
"Concerns about the UK's fiscal plan and its broader economy suggest sterling will likely stay offered against the dollar and other major currencies in the near term."
Analysts are looking closely at this week's performance against the pound and euro as a sign that bitcoin's forecasted "de-coupling" from traditional markets may be near at hand.
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