The political and economic climate within the UK has been uncertain in recent months, to say the least. As events such as the Brexit vote and the recent departure of the prime minister have been shown to have a direct impact on the value of the pound, and despite the acceptable performance of the economy overall and the political impasse, markets still fear an abrupt Brexit. If that comes to happen, where can investors find a safe heaven, or at least a place where to put their money while things get sorted out? In this scenario, are cryptocurrencies the best bet during a political upheaval?
Some experts, like Ana Bencic, Founder and CEO of NextHash, do think so. Firstly, because the British Pound lost 3% of its value only in May. Upon the Theresa May’s resignation, the pound dropped to 1.26 levels against the dollar (-0.20%) and 1.13 against the euro (-0.50%) whereas cryptocurrencies like Bitcoin appear to be untouched. Bitcoin’s value was recently valued at $8000, after a period of sustained growth, despite the political situation that has weakened the pound.
And secondly, because cryptocurrencies are not subjected to national economic performance or inflation whatsoever. They are a radical departure from traditional financial schemes, and as such, they aren’t affected by the same synergies. In fact, cryptocurrencies have had a good run in the last months, as we mentioned before, with Bitcoin value soaring in April and being stable ever since.
“The pound and euro have fluctuated in value in correlation with major political events happening within the EU and the UK. Traditional currencies, by their nature of being linked to a central bank, can be influenced by the political situation within the country,” said the expert.
Investors who have been paying close attention to the near-constant rise in the value of several cryptocurrencies will be looking at what makes cryptocurrency a viable alternative to traditional currency. In fact, Bitcoin have bee attractive to investors who are searching for a more stable alternative in a post-Brexit Britain.
And Ana Bencic concluded: “Bitcoin and other cryptocurrencies are a radical departure from the traditional financial systems and are better at storing value than any fiat currency. Because of the fixed and established inflation rates & supply sources of cryptocurrencies, they are not subject to the same inflation has been witnessed with traditional currencies.”
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.