EU and UK Closes Historic Brexit Deal; Bitcoin Hits a New ATH
Sterling rejoicing, US dollar weak, while Bitcoin ready to move back above $25k while on price discovery.
The UK has finally reached a historic deal with the European Union, just days before the country was due to leave the bloc’s single market.
“We were told we couldn’t have our cake and eat it,” Prime Minister Boris Johnson told a press conference on being asked about the compromises to be made.
“I’m not going to claim that this is a ‘cakeist’ treaty, but it is I believe what the country needs at this time.”
The agreement will allow for quota and tariff-free trade in goods after December 31 but the same rule won’t apply for about 80% of the UK economy — the services industry.
The Guardian called the deal “nothing but thin gruel,” that will only make it harder for Britain to sell services in the EU. Besides losing the right to freely travel, work, and settle in other European countries, the British also have to comply with EU regulations.
Ursula von der Leyen European Commission President
“It was a long and winding road — but we have got a deal to show for it.”
“It is fair, it is a balanced deal and it is the right and responsible thing to do for both sides.”
While little was changed in the US market, the Stoxx 600 Index gained after the deal. The British pound strengthened and is now nearing its highest since mid-2018.
As the pound rallied against most major currencies, the US dollar index remained just above 90.
“To some extent, the devil will be in the detail, yet markets and the pound are likely to celebrate almost any type of agreement that avoids a no-deal scenario,” analysts at IG said.
This has expected to bring some volatility in the markets, Bitcoin can feel some as well. Already, the digital asset is preparing for the expiry of bitcoin futures and options contracts on Friday.
Currently trading around $24,960 BTC -5.66% Bitcoin / USD BTCUSD $ 55,409.67
-$3,136.19-5.66% Volume 71.73 b Change -$3,136.19 Open $55,409.67 Circulating 18.71 m Market Cap 1.04 t 7 h Swiss Bank UBS Plans Cryptocurrency Offerings to High Networth Clients 8 h Tom Brady, A Seven-Time NFL Super Bowl Champion, Dons Laser Eyes in Support of Bitcoin 11 h Deribit Lists Ether at 50k Strike Options with March 2022 Expiry , BTC hit a new ATH yesterday at $25,026.86 and is preparing to move above $25k again on the back of strong institutional demand.
Just this month, Brexit party leader Nigel Farage went “full crypto” while calling fiat currency “funny money,” which the governments continue to print at warp speed. This has made it “crucially important” to understand crypto, he had said. Elsewhere, he called Bitcoin “the ultimate anti-lockdown investment.”
UK investors have actually been taking an increasing interest in Bitcoin, with 38 times more money in sterling being exchanged for the cryptocurrency on crypto exchange Kraken than this time last year, as per a recent report.
Marcus Hughes, Europe manager at crypto exchange Coinbase also said that the ongoing evolution in the industry is driving customer activity in the UK. “Increased levels of institutional interest, corporates, including MicroStrategy, taking Bitcoin onto their balance sheets and wider awareness of payment mechanisms” is driving the higher trading volume of BTC in the UK.
Recently, UK-based Ruffer, which manages £20 billion of assets has allocated 2.5% of its assets in Bitcoin just this month.
“This news is important because they are a well-regarded firm among UK wealth managers,” wrote Charlie Morris of ByteTree. “I believe UK wealth will have to find ways to follow suit.”
Additionally, the Financial Conduct Authority making it mandatory for companies selling crypto assets to register starting in January may be helping make the digital asset more acceptable for investors.