Brexit: The Downfall of Sterling & Advancement of Bitcoin, Cryptocurrencies
If something seems too good to be true, it probably is!
Fifty-two percent of British voters approved a Brexit referendum that advocated a deal that would remove the UK from the EU without sacrificing any advantages. But turns out it was based on the false promises.
On March 29th, 2019, UK has been scheduled to leave the EU as per the process triggered by Theresa May on March 29th, 2017.
Well, the day has been gone. Now after being defeated by 58 votes on Friday, May along with her cabinet is looking to bring her EU withdrawal agreement back to the Commons in the fourth attempt.
Just a few days back, she even put an interesting proposition in front of the lawmakers when she said she will resign if Britain's Parliament passes her withdrawal agreement. However, it has been already voted down by huge margins.
Implications Of Brexit On Sterling
On January 16th, a market opened where speculators bet £3.9 million ($5.1 million) on whether Britain will crash out by March 29th on Betfair Exchange, a betting website.
Every time it seems Britain will leave the EU without a deal, sterling has fallen against the dollar.
Source: The Economist
For each ten-percentage-point rise in the probability of no deal, there has been a loss of $0.02 in the pound and vice versa. This means, in the event of no-deal, there is a high probability that sterling would drop to as low as $1.08 that was last reached in 1985.
Brexit not only has influence over the respective currencies but also on the market actions. Just like US-China trade war, Brexit can also bring volatility into the market.
What About Bitcoin & Cryptos
Against the backdrop of this turmoil, people have been showing increased interest in Bitcoin and cryptocurrencies.
As we reported earlier, 62 percent of the specialists believe Brexit would have a positive impact on the crypto market and its prices. Moreover, 74 percent of surveyed people are considering to buy cryptocurrencies.
Earlier this year only, when the largest cryptocurrency exchange Binance launched its Jersey-based trading platform, it got ”overwhelmed” with the registration requests that the CEO Changpeng put as “crazy” demand.
The self-inflicted wound in the form of Brexit has initiated doubt among the people and is further playing havoc on the local financial markets and it’s future as a traditional baking hub, here Bitcoin and cryptocurrencies could emerge as the alternative investment option and store of value that could bring a new wave of innovation in the economy.