Bitcoin’s performance in relation to the Euro, Pound, and US Dollar has been influenced by the different economic conditions in their respective regions. The Euro has been weak compared to the US Dollar and British Pound, leading to Bitcoin outperforming in Euro terms. This is due to the euro taking more to purchase the same amount of Bitcoin, while the dollar’s strength has dampened Bitcoin’s apparent gains.
The Pound has shown relative weakness to the Euro, as the UK’s economic stagnation and the Bank of England’s reduced hawkishness have placed pressure on GBP. Since the US election, Bitcoin’s performance against these three currencies reflects the most recent macroeconomic and geopolitical developments, with BTCUSD gaining 42.38%, trailing BTCEUR and BTCGBP, which grew 46.22% and 45.87%, respectively.
The dollar’s persistent strength has tempered BTCUSD’s gains, while BTCEUR and BTCGBP were relatively unaffected by the political event, remaining a function of their respective fiat weaknesses. The divergence in Bitcoin’s performance across these pairs shows the influence fiat volatility has on perceived returns.
The euro and pound have been more volatile than the dollar this year, particularly due to contrasting monetary policies and economic prospects. This volatility exaggerates Bitcoin’s price movements in EUR and GBP terms, creating the illusion of greater returns compared to BTCUSD. As the Eurozone continues to face growth challenges, Bitcoin’s outperformance against the euro is likely to persist, while the pound has shown slightly more resilience due to less severe structural concerns, aligning with BTCGBP’s middle-ground performance relative to BTCUSD and BTCEUR.
The short-term trends observed since the US election on Nov. 5 reveal a rather interesting market state. Despite the USD’s strength, BTCUSD steadily increased during this period, suggesting that while the dollar’s strength muted Bitcoin’s gains compared to BTCEUR and BTCGBP, it did not entirely stifle its price momentum.
For BTCEUR and BTCGBP, continued EUR and GBP weakness after the election allowed Bitcoin to sustain its relative outperformance. Eurozone and UK markets increasingly look to Bitcoin as a hedge against depreciating fiat currencies.
