On Sept. 16, 1992, the British pound dropped to its all-time low. The day has since become known as “Black Wednesday,” or the day George Soros broke the Bank of England.
The historically stable currency lost 4.8% of its value against the U.S. dollar, effectively keeping the U.K. out of the E.U.’s newly formed European Exchange Rate Mechanism (ERM). The country joined the ERM in an effort to support the unification of European economies but effectively failed to adhere to the terms of the ERM.
Britain’s inability to keep the pound stable opened the door for speculators to short the currency. George Soros, an investor and fund manager, amassed one of the largest short positions on the pound which enabled him to pocket $1 billion.
On Sept. 26, 2022, the British pound experienced a flash crash almost as large as the one on Black Wednesday, losing 4.3% of its value against the U.S. dollar.
One of the main culprits behind this crash could be large traders. Significant options barriers at 1.07 pounds to the dollar triggered a cascade that saw the pound drop through 1.06, 1.05, and 1.04 in a matter of hours. The pound currently stoji at just 7 cents above parity with the U.S. dollar.
Since the beginning of the year, the pound crashed over 21% against the U.S. dollar and 8% against the euro.
While the pound’s woes might look recent, the currency has been experiencing a steady drop for the better part of the last 8 centuries.
Kako je funta pala na 30-godišnji minimum, ljudi su pohrlili u čvrstu imovinu kako bi izbjegli velike gubitke. Dana 26. septembra, obim trgovanja BTC/GBP porastao je preko 1,200% pošto su vlasnici britanske funte počeli agresivno da kupuju Bitcoin. Ovo je u oštroj suprotnosti sa parom BTC/USD, koji je tokom ljeta imao relativno stabilan obim trgovanja na centralizovanim berzama.
The rapidly weakening pound posed a massive threat to government debt markets in the U.K. The possibility of systemic risk to the country’s financial stability forced the Bank of England to take emergency action and intervene in the bond market. On Sept. 28, the Bank of England announced that it would suspend its program to sell gilts and start buying long-dated bonds.
Britanski kancelar Kwasi Kwarteng je nedavno nametnut smanjenje poreza i planove zaduživanja dodatno je smanjio funtu i doveo do oštrog smanjenja državnih obveznica Ujedinjenog Kraljevstva. Kako bi zaštitili svoje udjele od rizika povezanih s inflacijom i rastućim kamatnim stopama, većina penzionih fondova ulaže velika sredstva u dugoročne državne obveznice. Hitne mjere Banke Engleske pokušaj su da se pruži podrška hiljadama penzionih fondova koji su u nedostatku novca. opasnost neispunjavanja poziva za marginu.
This is a stark reminder that the world of traditional finance can be as unpredictable as the crypto market. Flash crashes and speculation could become a new reality for fiat currencies and commodities many thought to be resistant to manipulation.
Source: https://cryptoslate.com/british-pound-drops-to-all-time-low/