A number of fundamentals have been driving Bitcoin in recent weeks, such as the escalating US trade war in China and the UK's exit from the EU. Some analysts are predicting a new high time for BTK at the back of one of these events.
Bitcoin fueled by economic problems
According to a report in The Independent, Brexit can send increased bitcoin without a contract. The UK has been at a standstill with European lawmakers for almost three years over leaving the union. This economic uncertainty has caused the GBP to drop to its lowest level for more than a decade. With EU bureaucrats standing fast and unwilling to negotiate, a deal or "hard" Brexit is announced on October 31.
Blockchain CommerceBlock chief executive Nicholas Gregory commented that this could send bitcoin to a new high this year.
Bitcoin has rediscovered the mute with multiple mini raw materials this year, but Brexit can be a big and unprecedented breakout without a deal. Not only will leaving the EU without a deal create turmoil and instability between the two major Fiat currencies, but it will also cause an identity crisis for the global system, as the unpredictability and vulnerability of the largest global Fiat currencies are stripped.
The 'safe haven' argument has been increasingly applied to bitcoin in recent months, as global economies and their fiat currencies are under pressure from political and financial tensions. Like gold, BTC is now considered a store of value free from state interference or global politics. Bloomberg noted that the correlation of bitcoin prices with gold has doubled in the last three months.
EToro trading platform analyst Simon Peters noted that gold has traditionally been a safe haven, adding:
However, bitcoin also seems to serve a similar purpose. As Chinese investors make up a large proportion of crypto-investors, there is a great opportunity for some to support bitcoin's chances against the yuan.
The pressure on Britain and its new prime minister, Boris Nonson, is increasing. He argues that Britain will leave the EU on that date with or without an agreement. After a majority vote in the June 2016 referendum, Britain was in a state of economic uncertainty as inadequate politicians debated their agendas without a clear path forward.
Gregory added that this would cause the bitcoin's place in the global economy to change.
Come 2020, we expect an increasingly populist and politically unstable world to cement the status of safe haven of bitcoin and other cryptocurrencies more generally. And if central banks return to printing money again, the case for bitcoin-bound cryptocurrencies will be further intensified. Every time the central bank increases the money supply, it's another nail in the Fiat coffin.
This may be closer to the truth, as the UK is a difficult hub for bitcoin and cryptocurrency adoption; very few of his 66 million people even know what it is. However, the wider implications of Brexit and the financial uncertainty surrounding Fiat could increase the demand for BTK and digital assets immune to government or central bank manipulation.
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