No-Deal Brexit – Alternatives like Bitcoin to appear even attractiveOctober 21, 2019
In the event of a no-deal Brexit, the UK cryptocurrency industry will likely be affected. There is very little guidance from the Financial Conduct Authority (FCA) regarding how it might affect the crypto-based services in the UK. There is not enough clarity in this area.
In the long-term, a no-deal Brexit is expected to be positive for the UK cryptocurrency industry. This is because it facilitates for the UK to create its regulatory systems without any kind of interference from the EU, who are less friendly to the cryptocurrency industry when compared to the UK.
There will be minimal impact on the EU customers who have been using the British-based exchange or wallet services and vice versa.
Most exchange deposits within Europe take place through the SEPA bank payments for British and EU customers.
The no-deal Brexit will see the Pound weaken further versus the Euro. The people might most likely begin looking for a haven beyond the fiat.
In response to the Brexit, Bitcoin, Gold, and the Pound reacted in different ways. On the night of the vote, the Pound touched upon a high of $1.5. The price of the gold went up by 7% versus the USD.
It was already well known that the Brexit will affect British life in most ways. There is not enough proof of whether the Bitcoin will serve as a hedge in the developed markets. The confidence in the Pound will be shaken by the no-deal Brexit.
Glen Goodman, stated, “This doesn’t mean nobody will want to invest in the UK anymore, but it does mean that investors will be looking to hedge their sterling risk with non-correlated assets such as Bitcoin because it’s an asset that doesn’t depend on the future of the British economy.”
Markets do not like uncertainty. The fortunes of economies and national governments are related to the faith people have on the fiat currencies. If different national currencies are going to fall in value, then investors will find alternatives like the Bitcoin to appear even attractive. The guarantee of the fixed supply of Bitcoin will seem impressive when compared to the national and incontinent printing of fiat currency.
Glen Goodman further stated, “The cancellation of Brexit altogether would probably cause the Pound to rise significantly. All of these moves in the Pound would, of course, have a negative impact on BTC/GBP.”
Almost all the cryptocurrencies were depressed in price trends over the weekend session.