Keep Calm & Bitcoin On …as Brexit Vote Looms
The much-anticipated Brexit vote will be held this Thursday, June 23rd, with polls showing an almost equal amount of people in favor of remaining as there are people in favor of leaving the EU. This has created an environment of uncertainty, leading people to search for alternative ways to secure their wealth. Also read: Quoine […]
The much-anticipated Brexit vote will be held this Thursday, June 23rd, with polls showing an almost equal amount of people in favor of remaining as there are people in favor of leaving the EU. This has created an environment of uncertainty, leading people to search for alternative ways to secure their wealth.
Also read: Quoine Gets $20M Funding as Asian Bitcoin Trading Soars
Brexit Brings Uncertainty
American companies and investors are not exceptions as they are not immune to the financial uncertainty that underlies the so-called “Brexit.” The UK is a large, globalized economy that provides profitable relationships all across the world. As such, the country’s problems relating to the referendum vote are in no way isolated problems, and any turmoil coming from the vote will certainly leave a global footprint.
This footprint would undoubtedly be noticeable in the US, and some believe that shares of US companies with a relatively high amount of reliance on British sales could face a dire future if the UK decides to leave the EU. In fact, there are 30 firms trading in the S&P 500 that derive 10% or more of their revenue from the U.K., according to Factset data.
The referendum has already made its impact on trading, with US stock exchanges ending this week in the red as the result of Brexit worries. All of the major exchanges ended up negative for the week, with the Dow Jones Industrial Average DJIA, -0.33% declining 1.1%, while the S&P 500 index down 1.2%, and the Nasdaq Composite Index falling 1.9% for the week.
Behind China, international revenue across the S&P 500 is most exposed to the UK. As it happens, the U.S. accounts for 68.8% of S&P 500 revenue, followed by China accounting for 4.9%, and then the U.K. with 2.9%. This means that there is fair amount of market risk to the Brexit vote and could result in a financial downturn. According to FactSet, the economic sectors most vulnerable to this risk are energy, tech, and material.
Keep Calm & Bitcoin On
With a high amount of financial uncertainty coming with the upcoming referendum vote, there are many that are flocking to alternative methods of securing their wealth and savings. One of these alternative methods happens to be Bitcoin. Some say that evidence of this has been Bitcoin’s recent surge in price — believing that the Brexit vote has been a major factor in the currency’s price surge.
Another product of the Brexit could be the implementation of capital controls by struggling countries, and as a result, more people could begin to flock to Bitcoin to protect themselves. Of course, this is even without mentioning the possible devaluation of the Pound Sterling that many expect to happen, and to some extent, has already happened.
However, despite all of the uncertainty and worry coming from the Brexit, one positive thing to take from all of this is the distinct possibility that Bitcoin could very well take advantage of this situation. As it coincides with a price surge that may or may not already be driven by the referendum vote, which could very well become a breakout moment for the cryptocurrency.
What do you think of the upcoming ‘Brexit’ vote? Do you think Bitcoin will ultimately play a role in it? Let us know in the comments below!