Several essentials have been serving as the driving force for Bitcoin in the recent past. Notable among these are the raging trade wars between the US and China and the United Kingdom’s exit from the European Union. Some enthusiasts in the crypto industry are predicting a new record high for Bitcoin following these developments.
Economic turmoil boosting Bitcoin
The Independent has reported that a no-deal Brexit could have the resultant effect of largely boosting Bitcoin. The UK and the European Union lawmakers have been at loggerheads concerning the former’s move to exit the Union for a while now. The stalemate has actually lasted for the last three years. With this stalemate has come the slumping of the GBP to about its lowest since the beginning of the decade. As it stands now, there appears the possibility of a no deal for the Brexit as the EU lawmakers push against and appear to not to have the desire for negotiations.
The CEO of CommerceBlock, a Blockchain firm, Nicholas Gregory has issued comments opining that this loggerhead situation could just be the fuel that BTC needs in order to soar past its record. The uncertainty of Brexit, as he seems to suggest is for the good of the cryptocurrency.
Gregory’s argument holds water largely. In the recent past, a number of fiat currencies have plummeted. The major reason attributed to these slumps is the pressure on global economies following political and financial tensions. Simply put, similar to gold, many investors now view Bitcoin as a safe haven for storing their value. This safe haven is of course the protection from state interference or the ripple effects of global politics. Equally reiterating, Bloomberg has noted that the price correlation between bitcoin and gold has gathered in the period of the last three months.
Etoro’s Simon peters, an analyst at the trading platform posits that traditionally, and conveniently so, gold has been the value storage of choice. He further adds “yet bitcoin also seems to have served the same purpose. Given that Chinese investors make up a large proportion of crypto investors, there is a strong possibility that some are backing bitcoin’s chances against the yuan”
Britain and its newly elected Prime Minister Boris Johnson continue to face mounting pressure. The prime minister has categorically opined that the UK will be exiting the EU on the set date regardless of a deal or otherwise.
Failures in numerous fiat
Additionally, Gregory suggests that this uncertainty of a deal or no deal as concerns the UK’s exit from the EU would consequently alter Bitcoin’s position and even acceptance in the global economy. He says, “Come 2020, we expect an increasingly populist and politically unstable world to cement the safe haven status of bitcoin and other cryptocurrencies generally. And if certain banks revert back to ramping up the money printing all over again, the case for cryptocurrencies like bitcoin whose supply is capped will be further reinforced. Each time a central bank increases the money supply, it’s another nail in the coffin of fiat”
Gregory’s sentiments are by far closer and relevant to the truth than most can find easy to believe. Considering that the United Kingdom has lagged, perhaps even discouraged the adoption of bitcoin or any other cryptocurrency, a great percentage of its population lack even the mere knowledge of what cryptocurrency is! Nevertheless, it can be established that the ramifications of the Brexit and the ensuing financial turmoil facing the fiat could most certainly lead to an uptake in the demand for BTC and other digital assets. This will be the case as the cryptocurrencies are invulnerable to manipulations by governments or even the central banks.