In yesterday’s UK General Election, the British people voted for the Conservative Party to take office for another term. The pound responded with a sudden rise in value reminiscent of a Bitcoin move.
However, with the now majority Conservative party campaigning to just “get Brexit done”, the future value of both the pound and euro is anything but certain. Economic uncertainty has long been linked with rising Bitcoin interest, and there is no shortage of that in the UK at the moment.
Does Bitcoin Become More Alluring in Times of Uncertainty?
Last night’s general election in the UK represented a serious upset to political norms of the nation. Several consistently held left wing strong holds fell to the rightist Conservative Party. The result, announced this morning, will see the first majority Conservative government take power since 1992.
The Conservative’s traditional opposition in the essentially two party British system is Labour. Led by Jeremy Corbyn, a very much love him or hate him, old school socialist type, business interests would have certainly been threatened if the UK’s largest left wing party got past the post first. The markets breathed a sigh of relief as the party of business came out a clear winner in the early hours of this morning.
Pound shoots up like a Bitcoin pump. Up 2.3%. pic.twitter.com/ia3kOh138l
— West 93 🇬🇧 (@ViewFromBlock93) December 12, 2019
Despite the sudden gain in the pound’s value, Brexit still looms and the nature of the UK’s now-as-good-as-certain departure from the European Union is anything but clear. Boris Johnson, the previous and continuing Prime Minister, campaigned and won alongside a ruthless media machine with the simple message to “get Brexit done”.
It seems likely that any exit from the European Union will see both the euro and pound devalued, at least in the short term. A particularly abrupt exit without any form of trade deal could leave the pound in a bad way for the foreseeable future. In times of such uncertainty, store of value assets become attractive.
Although Bitcoin has hardly proved itself a store of value yet, the leading digital currency does possess all the qualities of something typically highly valued – it’s finite in issuance and it’s incredibly difficult to create more of. For these reasons, Bitcoin has often been compared to gold. The only thing the digital currency lacks is the historical precedence of gold, which is something it’s working on.
It would be naive to assume that Brexit alone will encourage UK citizens to go out and buy Bitcoin in their droves. However, events like Brexit are clear symptoms of an increasingly fractured world. In a time of widespread distrust, it seems only a matter of time before a system that removes the need to trust a fallible human gains significantly in popularity. Many early Bitcoiners talk about the Greek or Cypriot banking crisis as fuelling their own interest in the digital asset. It, therefore, doesn’t seem like much of a leap to think that the threat of losing savings thanks to a badly handled Brexit will encourage more folks to explore alternatives too.
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