The fallout of Brexit could boost Bitcoin and other cryptocurrencies.
The decline of the Pound and UK assets
After former Brexit Secretary Dominic Raab was eliminated in the second round of voting, the remaining five candidates took part in a live televised debate. Unsurprisingly, Brexit dominated Tuesday evening’s debate between Boris Johnson, Jeremy Hunt, Michael Gove, Sajid Javid and Rory Stewart.
Founder and CEO of deVere Group, Nigel Green, said: The debate between the five men vying to be the UK’s next prime minister underscores that the pound can be expected to fall further. The chaos and uncertainty triggered by Brexit – which has recently intensified by the race to become the new Prime Minister – has put the pound on a considerable downward trajectory.
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An already battered pound has lost almost 5 per cent of its value against the U.S. dollar since the start of May. Similarly, it continues six straight weeks of falls against the euro. Against this backdrop of growing uncertainty and a looming deadline, the pound and UK assets will likely have further to fall.
Boost to Bitcoin
Green’s observations also come at a time as Bitcoin, the world’s largest cryptocurrency, hit a 13-month price high on Sunday above $9,300, with predictions of the next crypto bull run making headlines. Bitcoin prices have soared more than 200 per cent over the last several months.
We are already seeing that local and international investors in UK assets are responding to the Brexit-fuelled uncertainties by considering removing their wealth from the UK. One such way that many are looking to diversify their portfolios and hedge against legitimate risks posed by Brexit is by investing in crypto assets, such as Bitcoin.
Crypto assets are often used around the world as alternatives to mitigate geopolitical threats to investment portfolios.
In May this year, deVere carried out a global survey that found that 68% of participants are already invested in or will make investments in cryptocurrencies before the end of 2022.
Of the survey’s findings, Nigel Green commented at the time: Crypto is to money what Amazon was to retail. Those surveyed clearly will not want to be the last one on the boat.
As Boris and Brexit continue to dominate the agenda, Bitcoin and the wider cryptocurrency sector could experience a boost as investors seek to protect – and build – their wealth by hedging against the geopolitical risks they pose.