Amidst significant international uncertainty, including a falling Argentinian economy, tense negotiations between Beijing and Washington, and a possible no-deal Brexit, the cryptocurrency market seems to benefit from the chaos. Some analysts believe that, in the event of a no-deal Brexit, Bitcoin may even reach new highs.
Crypto prices are profiting from the current chaos
In an interview with The Independent, CEO of crypto exchange ‘Luno’ Marcus Swanepoel, stated that both the Argentinian crisis and the ongoing trade-war contributed to Bitcoin’s price. According to him, Bitcoin broke the market trend by recently breaching the $10,000 resistance level. Swanepoel further indicates that the market is now focused on Europe, especially on the developments in the UK.
British Prime Minister Boris Johnson recently announced that the UK will leave the European Union by the deadline, even if a no-deal Brexit is necessary. As a reminder, the most recent deadline for the UK is 31 October 2019, by which a deal should be made. If that is not the case, the parliament may decide to hold a vote in order to prevent Britain from leaving without an established deal.
Especially following the American Labor Day, the further development of the crypto price remains highly interesting to Swanepoel. After all, according to him, September is usually the busiest month for trading during the year which is why he is looking forward to an increase in trading volume.
The British financial market is struggling
While the cryptocurrency market experienced a bullish rise, the British pound has severely deteriorated, reaching its lowest rate against the US dollar since January 2017. According to the Chief market analyst of Markets.com, Neil Wilson concluded that the British pound may fall further in the case of an election and may become progressively worse if a no-deal Brexit is the only option left by the end of October.
Concerning the yield-level of UK’s ten-year bonds, they deteriorated to 0.5%, resulting in a new record low. While the global financial market experiences low volatility due the sudden shift in global events, the British financial market has ceased with all optimism. The UK may make a devastating move by not reaching a deal with the EU, as the European Union makes half of the UK’s exports. The British economy would thus face a significant loss due to it being deprived of its most important trading partner.
What a no-deal Brexit would mean for the crypto industry
According to some views, reaching no deal could lead to a less-strict regulatory framework for cryptocurrencies in the UK. As the EU would no longer govern the UK in terms of regulations, the island-country may decide to accept the cryptocurrency industry in order to bolster its economy and lessen the impact of a no-deal Brexit. Considering that the British financial market is one of the most significant ones in the world, a crypto-friendly regulation could lead to more adoption and a rise in both trading volume and the current crypto prices.
Bitcoin is regularly praised for being an important store-of-value option, with some calling the currency ‘digital gold’ as only 21 million coins will ever circulate in the market. Combined with the fact that anyone in any location on earth can purchase Bitcoin, a currency which isn’t controlled by any centralized entity, several investors have bought Bitcoin as a safe-haven asset.