As the day after the UK referendum whether to stay in the European Union or leave it unfolded, there is little doubt that history was made on June 23, 2016. The voters in England, Northern Ireland, Wales and Scotland cast their ballots with a simple answer. In the early morning hours of the next day, the votes were counted.
The result stunned the world and it seems even some of the voters for the Leave campaign. With the majority of the votes, the Leave campaign had won. Now, that United Kingdom voted to leave the EU, no one clearly understands either what is going on current when it comes to the market reaction or what is about to happen in the coming days and weeks.
But, in the BitCoin community, the same event is also followed with great apprehension but also a willingness, at least on the part of the BTC traders, to make a profit, potential even a huge one. Here are the key facts about the geopolitical, economic and financial repercussion of the event known as Brexit and what can be expected in the immediate future when it comes to the UK, but also the effects this has on the BTC price and the community at large.
The Internal Politics
The Leave campaign and the politicians that back it produced a huge, almost unimaginable success. With their focus on the supposed downsides of being part of the EU, they managed to mobilize enough voters, mainly older individuals from the rural parts of England and Wales. Because of this, the main political fallout landed on the Conservatives and the Labor party, which backed the Remain camp. Now, PM David Cameron resigned as the result of the vote and the pressure is on Jeremy Corbyn to do the same.
There is a substantial chance that Corbyn, who openly criticized some inadequate aspects of the EU, will keep his position as the leaders of the Labor party, but there is no doubt that the damage is done. On the other side of the divide, Boris Jonson, and Nigel Farage feverously backed the Leave initiatives. Both of them will most likely emerge as important national forces for the upcoming election, especially if they can capitalize on the vote as a representation of support for their other agendas.
The problem for the UK is that this is not certain by any means. Farage is a divisive figure and there is a low likelihood that he could enter the fray in any substantial manner when it comes to actually running the country as a PM. Jonson recently stopped being the Mayor of London and his future is equally dubious. More worryingly, the regions that had a high percentage of Remain votes, mainly Scotland and Northern Ireland, are eyeing the possibility of their own referendums about remaining in the UK.
Scotland’s political elite was most vocal when it comes to these notions, in spite of the fact that their previous referendum took place just last year. However, with the nature of the current voting trends, it is not hard to imagine that the Scottish independence movement could quickly gain in strength. At the same time, Northern Ireland remains a volatile region which rarely received anything good from instability in either Republic of Ireland or the UK.
Because of this, it is almost impossible to imagine any BitCoin development companies or investors deciding that now is the right time to expand into the UK. Additionally, while the legislature in the EU appears to be shifting in favor of the BitCoin digital currency, which is regularly used for a range of things like retail and shopping all the way to using BTC to bet online. The UK regulatory bodies would most certainly have to play catch-up with their continental partners, which could make anyone easily choose the bigger market over the United Kingdom.
The UK economy is going to be hurt by the Brexit, there is little doubt about this. Now, the only issue is what exact shape and form will this impact come. The Leave campaign assured their voters that the money for the UK will increase with the country leaving the EU, but now, there is even less certainty that this will take place.
As expected, after the Leave victory was declared, the markets took a tumble down on both sides of the Atlantic. Because of this, there is a chance that the growth of the UK economy will stop sharply, even enter a recession like the one seen in 2008/09. Some believe that in the several upcoming months, the Brexit economic impact could lead to even more serious repercussions.
Of course, there are plenty of those who believe that this will not produce any major damage in the long run and that it even could enforce the rebirth of the British domestic economy. The problem is that by exiting a big trading block, the UK is losing its access to a several-million-strong market, while no new opportunities will present itself outside of the EU because of the Brexit. This means that any venture, no matter if it is a company, a startup or a small E-Sports tournament, will have plenty of reasons not to do business in the UK which they did not have before Brexit.
As soon as the results of the referendum became known, the British pound took a nosedive, resulting in a loss in value inside for the last several decades. It is almost certain that the same chain effect will result in a drop in the value of the euro, the US dollar, and Swiss franc.
If the examples of China in 2015 are anything to go by, this will aid the BTC price immensely. In the scramble to preserve the value of their assets, traders will try to diversify their portfolios as soon as possible. Some of the money will go into traditional safe havens like gold, but a lot of it will pour into BitCoin. That is why the price of BTC climbed to $650 very rapidly on the same day Leave won.
If the Brexit occurred a year or two earlier, the same flight of capital into the cryptocurrency might not have happened. Now, after the Chinese traders obviously managed to successfully utilize BTC during a crisis, the same will be repeated in the UK to some degree.
The Hard Times Ahead
The world economy will not gain from Brexit and the same is also true for BitCoin. Aside from the short-term trading possibility, the event placed a lot of doubt in the EU as a whole and put the UK on a path to a recession.
Now, the wait for the uncoupling of the UK and the EU through the Article 50 of the Lisbon treaty begins. In this type of a financial environment, political uncertainty and economic slowdown (in the best case scenario), the BTC will have to hope for the best, just like many other parties impacted by the unexpected Brexit.