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How Brexit will Affect Crypto

by Matthew Harris
How Brexit will Affect Crypto

The UK withdrawal from the European Union, otherwise known as Brexit, has been in the headlines off and on for months now. While there has been much speculation regarding what it will mean for various companies, industries, governments and countries, the general consensus seems to be that it could mean good things for cryptocurrencies.

Markets have been greatly unsettled by the increasing disunity within the EU ever since British citizens voted to exit the E.U. This has spiked volatility across various British and European bond and stock markets as well as with the British Pound. Since Brexit appears to be set to negatively impact the Euro, it could result in wide-ranging financial consequences.

While crypto prices tend to be uncorrelated with traditional assets like Forex and stocks, world events that strongly influence the credibility and value of fiat currency and traditional financial systems generally seem to increase the demand for monetary alternatives. Which of course could mean good things for crypto.

In the same vein that cryptocurrency thrives during economic turmoil, a hard Brexit without an agreement in place could very well likely result in a positive impact for crypto. Additionally, a lack of an agreement could result in it becoming more difficult to spend GBP in international markets, which could send more people to crypto due to its usefulness for international transactions, as well as a hedge against declining GBP value.

However, a recent poll of 2,132 British citizens found that 73% don’t know what a ‘cryptocurrency’ is or they are unable to define it, and only around 3% of those surveyed had actually purchased cryptoassets. Not surprisingly however, those likely to be most aware of crypto were found to be men aged 20 to 44. Of course if Brexit results in a severe negative financial impact on the lives of Britons, all of this is likely to change.

Just the possibility of Brexit has been enough to induce major market fluctuations. If the U.K. is successful with Brexit, it could be enough to shake up the entire European Union project and if this happens, it could trigger a flight to safety across European and even global markets. With crypto providing a politically-neutral currency, the entire cryptocurrency industry could benefit from the potential turmoil and consumer panic.

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