Mode Banking sees Bitcoin trading volumes skyrocket during UK Lockdown

The London fintech behind the digital banking app that enables users to buy, store and earn interest on their Bitcoin holdings, Mode, has seen the volume of the cryptocurrency traded through its app increase by almost 1,000% in the last week of March compared to its average weekly trading volumes up until March. Ninety per cent of these trades were purchases. Mode’s users are mainly based in the UK.

Mode’s surge in trading activity was immediate after two main events that took place last month; the global markets crash at the beginning of March and the UK’s official lockdown announcement due to COVID-19 on March 23rd.

Following the markets crash, Mode users reported Bitcoin as having been undervalued and strongly believed this was a good ‘buying’ opportunity. Global markets saw a sell-off of almost 30% in the first weeks of March and Bitcoin saw a decline of around 50%.

The week after the UK went officially into lockdown, Mode, saw its biggest spike in trading activity, and it believes one reason for this could be that people had more time to think about their future and their investments and look for ways to diversify their portfolios.

There are two other factors that could also be fuelling this positive sentiment amongst investors. Firstly, the impact of Coronavirus aid packages and monetary stimulus programmes.  Trillions of dollars have been pumped into economies and stock markets around the world. This has been causing longer-term concerns about the US dollar and other currencies becoming debased, and inflation rising. The nature of Bitcoin means that quantitative easing and other monetary measures do not directly affect its price and thus it can be used to hedge against the impact of these on fiat currencies.

Secondly, the halving of Bitcoin that takes place next month. The number of Bitcoins entering circulation will drop by half which some market commentators and investors believe will drive up the cryptocurrency’s price.

Head of Marketing and Communications at Mode, Ariane Murphy said: “The price of Bitcoin really rallied in the second half of March and we saw a significant surge in people wanting to buy and hold Bitcoin through our app.”

“But not only that, with the launch of our new interest-generating Bitcoin Jar less than 2 weeks ago, we’ve seen 70% of the Bitcoin held via our app being switched from users’ Bitcoin Accounts into their Jars in order to benefit from our current 5% APY offer. We believe that this move shows that investors are in for the long term and want to make the most of their assets while holdings them.”

“It is difficult to pinpoint the exact reason that is driving this sentiment, but we hope that it keeps growing and that we continue to see more people access the Bitcoin markets in the future.”

“In terms of the current Coronavirus situation, we acknowledge that this is a very difficult time for many businesses and individuals out there, and in order to show our support to the cause, we will be donating to the UK’s National Healthcare Service very soon. We will disclose more details about this in due course.”

A Mode account can be opened in less than 60 seconds, with Know Your Customer (KYC) requirements usually completed in less than two minutes through AI-enabled identity verification technology. Once users are verified, depositing GBP via bank transfer and buying Bitcoin takes seconds.

Through its easy to use app, Mode aims to bring down the barriers and open up the Bitcoin market to everyone, not just tech-savvy or professional investors. As a result, users can get started with only £50, and unlike many other apps, Mode only charges a very competitive fee of 0.99% at the time of purchasing and selling Bitcoin. Mode doesn’t charge for transferring GBP in and out of users’ accounts, and funds are credit almost instantly via Faster Payments – a process that can take up to 5 days with some of the most renown crypto exchanges. Users’ Bitcoin is safeguarded through one of the world’s leading digital asset custodians, BitGo.

At the end of March, Mode launched ‘Bitcoin Jar’, which allows customers to use their Bitcoin to generate interest (in Bitcoin), unlocking the full potential of their digital assets rather than simply holding them speculatively in a wallet or on an exchange, waiting for the value to rise.  It offers a 5% APY with no lock-up periods – making it one of the most flexible, high-yield products in the Bitcoin market.

Author: Karen Estcourt