Bitcoin has been picking up a lot of momentum as a potential hedge against financial and political strife. Some think that, in a recession, Bitcoin is a good hedge, and could build to be an alternative to the traditional safe haven that is gold. However, a major event unfolded on Friday night as Brexit was finally concluded.
This big market mover for both Europe and the UK has however made no difference to the price of Bitcoin which is surprising considering the way Bitcoin has moved at much smaller rumours and speculation around issues in China and the US. What is more surprising is that when there was a threat of a no deal Brexit, people predicted Bitcoin would be the one to profit.
The United Kingdom, now separated from one of its biggest trading partners, is in a position where its isolation could spell the need for a more global and decentralized financial system. More so, for the sake of Bitcoin, there would be a chance for it to benefit from the more fintech-supporting UK, now separate form the EU, which, as an entity, is suspicious of cryptocurrency.
Bitcoin has had a promising January, and had been growing steadily since the new year started. It has benefited from not only internal factors, like the upcoming Bitcoin halving, but also external concerns about the state of the financial markets.
Brexit has also been seen as an affecting factor in terms of the financial markets as the uncertainty has seen the pound fluctuate and the state of the European Union also be in a state of flux. Yet, through this all, the movement of Bitcoin has shown no relevance to any happenings around Brexit.
Now, on February 1, Bitcoin continues to hover over $9,300, without showing movement either way in terms of the outcome of Brexit. But, this may well be down to the fact that no one is too sure what the outcome to the global markets will be from this divorce.
It could well be that Bitcoin’s market is not ready to move for markets that are relatively small. The UK, and even Europe, is a big player in terms of global markets, but with regard to Bitcoin, it is not one that sways it.
When the US and China, for instance, start knocking heads in a trade war, Bitcoin is quick to react, but that may well be because the market in those two countries is a lot more susceptible to speculation and market movement.