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Brexit and Bitcoin 30 Jul 2016, midnight

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Brexit and Bitcoin

In the process of negotiating the terms of Great Britain’s trade relations and internal politics by Brexit, the citizens of Europe have begun safeguarding themselves regarding the economic fallout. Most people outside of Great Britain, assumed Brexit to be an economic drag on the global economy. This sentiment is gaining power in Great Britain as well. Many economists are preparing on doom predictions, but this is to avoid a panic in some scenario.

Monetary panics are what caused the Great Depression about a century ago. When confidence in the bank’s holdings in the1920s drops drastically, a run on the banks eventually resulted in the great depression. People hurried to the banks demanding cash. When people lost confidence in particular currencies or institutions, they often shift their holdings to more conservative assets mostly cash or gold.

The dollar will surely be strengthened against the Sterling Pound post-Brexit, because it is still measured as the global standard and gold tends to gain value even if current events cause it to fluctuate. Cash usually holds value even when it is fluctuating or dropping. However, in the current economy, confidence, shocks and panics still move money and the post-Brexit fallout in the financial sector is increasing concerns over the long-term value of the Pound Sterling. Divesting in the Sterling Pound has been anticipated. What and where they're transferring their money into is a bit surprising, however.

Bitcoin has proven itself to be more reliable and stable as a substitute currency. Investors are rushing towards Bitcoin as investors in the past have bought gold. The new gold that people are rushing towards is Bitcoin, and this became more obvious as the Brexit unfolded. Confidence in Bitcoin keeps growing as the Sterling Pound is falling, largely because it is predictable and decentralised. As the Sterling Pound suffers from an indeterminate trade economy, Bitcoin is picking up the trend.

There are still many who are edgy about the value and durability of virtual currency, but there are several reasons why the value of Bitcoin has become trusted. First, we must realise that the core value of gold only exists in its usage in things like electronics and spacecraft. There is nothing inherently valuable about gold more than this. In fact, it cost lots of resources to mine it out of the ground, refine it and usually put it back in the ground in vaults. Therefore, this basically means that we don't want the gold, we merely want the knowledge that it is there.

This is practically why when people want a conservative form of money, they are now looking at Bitcoin. It is not chained to the institutions for its value and its use is ordinal, bypassing all of the normal frictions of currency and commodity. Since Brexit, people have lost confidence in the Sterling Pound and migrated to Bitcoin. The believed after this is that Bitcoin is decentralised and therefore less vulnerable to the fluctuations and reverberations that will accompany Brexit. Banks and trade economies are concerned with the effects of Great Britain having to negotiate trade terms with other European partners.

Follow Bitcoin Miners UK The statistics show us everything; the day before the surprising Brexit result, Bitcoin was valued at around 660 USD; GBP sterling was valued at nearly 1.5 USD and now post-Brexit the GBP is valued at 1.32 USD. However, when we compare this to just a few weeks ago Bitcoin was only trading at just over $200.

These currencies have become polar opposites, and this is very much down to Brexit destabilising the markets. This has demonstrated the power of Bitcoin yet again and has given another boost of confidence in Bitcoin. Being a global and decentralised currency Bitcoin is able to withstand these political and economic blows and is starting to demonstrate its benefits in times of perceived crisis.

It is remarkable, especially when considering how new Bitcoin is to people and one of its biggest struggles is that it lacks legitimacy. Now many more people are seeing its now becoming a viable alternative to cash and we see that 2016 may be the most important year for Bitcoin yet!


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