Ever since the shock of 9/11 reestablished the setup of the western geopolitics, there has been no single event as deeply impacting as the upcoming Brexit. The moment when the UK will leave the EU has mutated over the previous two and a half years from initial shock to the lull of a bureaucratic hellscape of the constant making of the decisions that actually never get made.
The lull where many people simply got confused and disinterested thanks to the terms like the backstop and the withdrawal agreement did not last forever. In fact and disturbingly, there are many right now on both sides of the English channel that would do anything to be back in 2017 or ever 2018. Now, the year of decision is finally here and there is no decision to be had. Much like a child who thinks that the problems will go away if he only keeps his eyes closed, the UK political elite is in a state of unexplainable flux.
The latest news included another failed vote and another round of pundits on the news channels talking how everything is messed up and utterly confusing. As the date or the dates draw closer, the question of Brexit is surely fast becoming the most important political event in Europe since the creation of the EU. Yet, with all of this happening, the cryptocurrency market might seem more distant than ever. Yet, there are clear indicators that these two are actually more connected than anyone would have guessed.
The Analysts take
Cindicator is a market intelligence firm active in the crypto domain. In 2017 it organized its own ICO. Now, the company collected the date on the analyst take on the Brexit event. According to their results, about 62 percent of the polled experts think that it will have a positive impact on the prices of bitcoin, other cryptocurrencies and the digital currency market in general.
Furthermore, most of them think that the deadline will pass – which was proven right on the last weekend in March – and will be extended. In fact, only about 19 percent said that the Brexit will take place on the original date of March 29th. About 22 percent believe that the UK will leave the EU without any deal or agreement that will govern the transition. Most saw the right possibility – 82 percent stated that a deadline extension will be put in place.
The UK politics of the recent days echo this sentiment. Prime Minister Theresa May’s recent re-submission of her agreement has been flatly rejected. This is the second failure of the basically same deal. Now, there are many in public life and the UK media that are drastically reconsidering the entire notion of a Brexit.
The Close Future
Currently, there is a small chance that the British government will simply ignore the will of the people and – in some shape or form – will stay in the EU. Of course, this possibility would be incredibly flammable among the Brexit voters and not just that, it would hardly get the approval of the parliament. This means that the Brexit, again, in some shape or form, will take place. This brings the entire issue to the most problematic part – the economy.
The Bank of England produced an estimate which shows a shrinking of the economy of almost 800 million pounds per week since the start of the Brexit crisis in 2016. The British pound has also lost 5 percent against the USD and over 10 percent against its neighboring Euro.
However, many are pointing out that the pound, because of the unique position of the UK in the global economy, has always been quick to change its value against other currencies. But, even if the more positive perspective is used, there is still the fact that the economy will suffer as the result of the UK leaving the EU
The London Impact
Possibly the biggest impact on the economy of the UK will be the changes in its capital, London. So far, estimates show that about 270 financial companies have left the City in preparation for the same event. Other companies are eying the same possibility and even those who claim that they will keep their Londer presence are diversifying. This means that they are also opening offices and putting plans in place that would allow them to make a quick exit if the situation after Brexit becomes too problematic for everyday business.
Yet, the companies are not moving continents or even going away very far. Analysts suggest that most of these firms relocated to Dublin in Ireland and Germany Frankfurt. Both countries have so far profited not from Brexit but its basic implications. The same question applies to cryptocurrencies as well – will they profit from the UK leaving the EU.
Looking for Instability
A couple of years ago, like during the Chinese devaluation of the yuan in 2015, the prospect of bitcoin in times of crisis was clear – its prices would go up if the fiat currencies entered unstable waters. This would mean that a hard Brexit would deliver a jump in bitcoin prices as well as a boost to other cryptocurrencies as well. The first wave of this movement would be the UK investors who would buy into bitcoin as a hedge against the drop of the GBP.
Others would buy into it as a means of securing cross border transactions in a moment when traditional mechanisms are in a legal state of limbo. In other words, if the UK leaves via a hard Brexit and without an agreement, will the bank transaction function in the same manner? No one can tell and this is why some would seek alternatives to these pipelines of money.
Still, when digital ventures grow, no matter if they are esports or cryptocurrencies, there is less and less certainty how will they behave when some external event takes place. This is why 20 percent of analysts believe that no type of Brexit will have not to type of impact on the price of bitcoin. Furthermore, 44 analysts think that there will be no change in UK crypto regulation. In other words, the likelihood that Brexit will not be felt in the crypto domain remains the most plausible option.