Money markets have been experiencing low volatility as a result of uncertainty stemming from the political landscape in Europe and the US-China trade war. Investors are cautious as they wait to see how the political situations will be resolved.
The threat posed by Brexit has affected money markets across the world as the British pound keeps losing its value against the USD. The UK’s ten-year bond yields also fell to 0.5%, a new record low for the country.
The European Union (EU) is one of the biggest trading partners for the UK. Half of the UK’s exports go to the EU, and losing this market would be devastating to the UK’s economy.
With Boris Johnson taking over as Prime Minister, the possibility of a no-deal Brexit is high, and this has affected the UK’s economy.
Brexit uncertainty provides an opportunity for crypto markets
Investors are moving their holdings into safe-haven assets to protect their investment from the possible effects of a no-deal Brexit. Gold and Bitcoin have outperformed the UK’s FTSE 100, which is the country’s benchmark index on the stock market.
More people are investing in cryptocurrencies because digital assets have become one of the stable and safe products in investment markets.
The price of Bitcoin has surged by over 1000% since Brexit was announced. The crypto industry in the UK is likely to benefit from the economic cracks caused by the decision to leave the EU.
Volatile market conditions will push more investors towards crypto assets. Large market cap crypto assets such as Ethereum, Litecoin, and Bitcoin are most likely to receive the attention of traders and investors.
Firms dealing with these assets can exploit the economic conditions in the UK.
In a survey conducted by Cindicator Analysis, 63% of the surveyed analysts said that Brexit will continue to be a source of uncertainty on the money markets.
73% said that they are considering cryptocurrencies for their portfolios when the markets are showing a low-risk appetite. These numbers show that there is an opportunity for cryptocurrency to become a leading investment choice in the UK.
Regulatory changes imminent
If the UK leaves the EU with no deal, it could lead to a change in policies about cryptocurrencies in the country. The country could become more favorable to crypto related companies.
The EU’s regulations which govern cryptocurrency will no longer apply to the UK. In order to boost its economy and encourage innovation, crypto-friendly policies may be put in place by the UK’s government.
Favorable crypto policies would go a long way in enabling the mainstream adoption of cryptocurrency in the UK. As scammers like the Bitcoin Code crypto robot emerge, regulators will take a strict line about some of these companies. If the currency restrictions cease to exist, crypto markets will experience increased trading volumes, and investors would flock to place their holding on markets from the UK.