BTCUSD, BTCGBP and BTCEUR are the most traded Bitcoin pairs, each reflecting the interaction between Bitcoin and the specific economic environment of their underlying currencies. Analyzing their respective performance allows us to gain insight into the global Bitcoin market and how local economic conditions affect price performance. While this data is limited to a single exchange, in this case Bitstamp, it provides a representative view of broader trends and allows for meaningful conclusions.
Year-to-date, BTCEUR has the highest return, up 130.39%, compared to 122.24% for BTCGBP and 120.85% for BTCUSD. This outperformance can largely be attributed to the euro's weakness against the dollar and pound. With the eurozone struggling with low growth and limited monetary policy flexibility, the currency has been hurt against a backdrop of dollar strength.
This devaluation boosts Bitcoin's profits in euro terms, as it takes more euros to buy the same amount of BTC. In contrast, dollar strength – driven by strong US economic data, strong Treasury yields, and expectations of more Fed policy for a longer period – has dampened BTCUSD's apparent gains, as a stronger dollar offsets the upward pressure on Bitcoin's price. .
In the three-month window, the trends remain stable and BTCEUR continues to outperform BTCGBP and BTCUSD. During this period, the weakness of the euro increased and reached its lowest level against the dollar in the last one year. The decline reflects a combination of disappointing Eurozone growth metrics, negative signals from the European Central Bank and geopolitical uncertainties.
Meanwhile, BTCGBP has shown a slightly stronger performance than BTCUSD, reflecting the relative weakness of the pound. The UK's ongoing recession and easing of the Bank of England's aggressiveness have weighed on the pound, even though it has slightly more flexibility than the euro.
Price performance since the US election suggests that Bitcoin's performance against these three currencies reflects the latest macroeconomic and geopolitical developments. Bitcoin rallied 42.38% after BTCEUR and BTCGBP rose 46.22% and 45.87% respectively. Sustained dollar strength has been critical in moderating BTCUSD gains. The market reaction to the US election was aggressive.
As the Trump administration's upcoming policies are expected to boost US growth, the election boosted the dollar and increased demand for US assets, weighing on BTCUSD. In contrast, BTCEUR and BTCGBP were relatively unaffected by this political event, and their performance remained largely a function of their respective fiat weaknesses.
The divergence in Bitcoin's performance across these pairs also reflects the impact of fiat volatility on perceived returns. The euro and pound have been much more volatile than the dollar this year, particularly given the contrasting monetary policies and economic outlook of each region.
This volatility exaggerates Bitcoin price movements in Euro and Pound terms, creating the illusion of higher returns compared to BTCUSD. As the Eurozone continues to face structural growth challenges, Bitcoin's outperformance against the Euro is likely to continue. While under similar pressure, the pound has shown little resilience due to less structural concerns, in line with BTCGBP's mediocre performance against BTCUSD and BTCEUR.
The short-term trends observed since the US election on November 5 show a rather interesting market situation. Despite the strength of the dollar, Bitcoin (BTCUSD) rose steadily during this period. This shows that while the dollar's strength reduced Bitcoin's gains compared to BTCEUR and BTCGBP, it did not completely stifle its price action.
For BTCEUR and BTCGBP, continued weakness in EUR and GBP after the election allowed Bitcoin to maintain its relative outperformance. This is especially important given that the Eurozone and UK markets are increasingly looking to Bitcoin as a hedge against falling fiat currencies.
post A weak euro is helping Bitcoin's outperformance in the eurozone appeared first CryptoSlate.
