Ethereum vs. GBP – Cryptocurrencies

Min Spread *
Target Spread *
Swap point Long/Short
-116.41 / -116.41
Nominal Value of one lot
Trading hours

Instrument description

Ethereum is one of the most dominant coin in the cryptocurrency market. Ethereum is an open-source and highly programmable blockchain platform that allows developers to form even other digital currencies without spending time and effort to build a separate blockchain. Vitalik Buterin first explained the Ethereum model in 2013, Vitalik was impressed by the Bitcoin platform but felt it needed a scripting language to allow users to develop applications.

Ethereum went live on July 30, 2015, and works on similar blockchain technology like the Bitcoin but allows users to use smart contract to develop decentralized applications (DApps) and set conditions to trigger a transaction. The most significant advantage of digital currencies, such as Ethereum, is its decentralization that allows individuals to make a digital transaction without any involvement of a third party. Ether is denoted as the native currency operating on the Ethereum platform.

Ethereum is a simple interconnection of ‘nodes’ that form the blockchain network that is not governed by any rules or policies of intermediaries such as banks. The miners or users perform a computational task and verify a transaction to earn their monetary reward. Blocks of codes are passed between the users to solve a mathematical problem and ensure that the code is kept in the Ethereum network.

The Enterprise Ethereum Alliance (EEA) is responsible for doing further improvements and enhancements in the Ethereum blockchain platform. Almost all the Initial Coin Offerings (ICO) are hosted on the Ethereum network, and in 2017 it had over 50% market share.

What is the ETH/GBP currency pair?

The Ethereum (ETH) pairing with Great Britain Pound (GBP) is given by ‘ETH/GBP’ where ETH is the base currency, while GBP is the quote or counter currency. The ETH/GBP pairing shows a combination of ETH, which is the second cryptocurrency with the largest market capitalization, and the British Pound, which is the oldest and third most prominent fiat currency in the world after the US Dollar and Euro. The crypto side, Ethereum, offers volatility while the GBP provides more stability, volume, and liquidity.

In the ETH/GBP trading, the Ether is used as a ‘utility currency’ and used to pay for the computational task of the Ethereum platform and not for the intention of paying for any goods or services. British Pound is listed among the major fiat currencies. Traders residing in the UK tend to be more comfortable trading ETH with GBP as they are more familiar with the price volatility and stability of the British Pound as compared to other fiat currencies.

The ETH/GBP pair attracts day traders due to its volatility and liquidity. The average daily of GBP is said to be 0.6%, while the average volatility of ETH ranges from 5% to 10%. The daily price changes in ETH/GBP allow traders to have the possibility to potentially profit, but it comes with risk if the market does not move towards the speculated direction.

The ETH/GBP indicates the relationship of Ethereum with the US Dollar. The ETH/GBP pair shows how many Euros are needed to buy one Ether. The current exchange rate is 1 ETH = £297.82.

History of ETH/GBP Pair

Ethereum was proposed through a whitepaper developed by a Russian/Canadian programmer called Vitalik Buterin in 2013. Ethereum worked on blockchain technology that already debuted with Bitcoin in 2009 and was picking up momentum. Vitalik was fascinated by Bitcoin but felt for application development, Bitcoin needed a suitable scripting language. Ethereum offered users to take advantage of ‘smart contracts’ and develop their own decentralized applications (DApps) without any involvement from a third party.

The Ethereum project was initially crowdfunded, and almost £14 million was raised. Ethereum started to develop in 2013 and 2014 but went live on July 30, 2015. At the end of 2015, the value of ETH was £0.8, but in the middle of January 2018, Ethereum reached an all-time high value of £1.132. The market capitalization of ETH/GBP is £31 billion, and the circulating supply is 112.65 million.

In 2016, Decentralized Autonomous Organization (DAO) was formed to serve as venture capital for attracting investment for further development of the Ethereum blockchain. In only 28 days, $150 million was raised, which was 14% of all Ethereum in circulation. But, unfortunately, when the investment was more than $50 million from the DAO was hacked.

The community of developers performed a split or hard fork in June 2016 to reverse the loss of investment, which led to two platforms; the older one was referred to as ‘Ethereum Classic, (ETC)’ while the new one was referred as ‘Ethereum. (ETH)’.

British Pound, mostly known as Pound Sterling, is the oldest currency still in circulation and official currency of United Kingdom (UK). GBP dates back to the late 8th century, and till the 1950s, British Pound was the most influential global currency and the gold standard for other currencies. GBP is ranked among the top four major currencies along with US Dollar, Euro, and Japanese Yen.

How to analyze the ETH/GBP Price Chart

If we study the price chart of the ETH/GBP pair, we notice that the pair traded in the range of £150.00 to £220.00 from the second week of February 2020 to the second week of March 2020. The value of ETH/GBP fell to the lowest value of £88.40 on March 16, 2020, but started to gain and trade positively from the second week of April 2020. In the last few months, the value of ETH/GBP is trading from £200.00 to £400.00 from the last week of July 2020 to the third week of September 2020. The highest value of ETH/GBP was £355.94 on September 1, 2020.

Currently, ETH/GBP pair trades on £297.82. The Bid price is 295.09, while the Ask price is 299.77.

If you speculate that the price of ETH will appreciate against the GBP, then you will go long or Buy, and likewise, if you guess the price of ETH will depreciate against the GBP, then you will go short or Sell.

What causes price change in the ETH/GBP pair?

Ethereum is a digital cryptocurrency, which means its value is not dependent on rules and policies of intermediaries such as banks or government institutions. The price of most cryptocurrencies is correlated with its adoption and market sentiment. If the price of Bitcoin is fluctuating, then it will influence the value of Ethereum as well.

The regulation rules of Ethereum in the UK also impact not only the price of Ethereum but also the exchange rate of the ETH/GBP pair. If the Ethereum users and DApps volume increases, this will also increase the demand for Ethereum, and users would have to pay to get more computational power. The competing cryptocurrencies, acceptance of Ethereum by different financial institutions, and improvement in the Ethereum network also affect the price of Ethereum.

The value of the British Pound depends on the monetary policy of the Bank of England (BOE) that reflects on the interest rates and inflation. The price of GBP is influenced by the balance of trade, economic growth, domestic and regional politics, and Gross Domestic Product (GDP). In recent times the value of GBP has seen regular fluctuations due to the UK’s decision to exit the European Union in 2016, which finally happened in January 2020.

The ETH/GBP is mostly used by traders in favor or ETH due to its high volatility as compared to GBP. Traders interested in trading, among other options may use CFDs (Contract for Differences), a financial contract that allows speculation and option of trading on both long and short positions on the underlying asset.

The information above is for education purposes only and cannot be considered as investment advice. Past performance is not reliable indicator of future results.

Available Cryptocurrency CFDs on R1investing

Symbol Description Trading hours
BTCUSD Bitcoin vs. USD 00:00-23:59 Buy Sell
BTCEUR Bitcoin vs. EUR 00:00-23:59 Buy Sell
BTCGBP Bitcoin vs. GBP 00:00-23:59 Buy Sell
ETCUSD Ethereum Classic vs. USD 00:00-23:59 Buy Sell
ETHEUR Ethereum vs. EUR 00:00-23:59 Buy Sell
ETHGBP Ethereum vs. GBP 00:00-23:59 Buy Sell
DSHUSD Dashcoin vs. USD 00:00-23:59 Buy Sell
ETCEUR Ethereum Classic vs. EUR 00:00-23:59 Buy Sell
ETCGBP Ethereum Classic vs. GBP 00:00-23:59 Buy Sell
ETHUSD Ethereum vs. USD 00:00-23:59 Buy Sell
LTCEUR Litecoin vs. EUR 00:00-23:59 Buy Sell
LTCGBP Litecoin vs. GBP 00:00-23:59 Buy Sell
LTCUSD Litecoin vs. USD 00:00-23:59 Buy Sell
BTGUSD Bitcoin Gold vs. USD 00:00-23:59 Buy Sell
DSHEUR Dashcoin vs. EUR 00:00-23:59 Buy Sell
DSHGBP Dashcoin vs. GBP 00:00-23:59 Buy Sell

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