How Will Brexit Effect the Crypto Market?
There is a lot of speculation around Brexit and with the leave date of October 31st fast approaching people and businesses are wondering what impact it will have on them. The UK will effectively be a single entity forging new allegiances and new trade deals, but many nations with existing deals with the EU will now face trade tariffs when trading with the UK. In the UK and the EU, cryptocurrency enjoys a comfortable platform and the market in these two economic areas is large and buoyant at the moment.
We look at what impact Brexit will have on crypto trading.
Deal or No Deal
One of the crucial factors and one that is being deliberated on in the UK parliament this week is whether the UK leaves the EU with a trade framework or not. The so-called deal.
If the UK does indeed leave the EU with a deal this could be a very positive signal for the financial markets and in turn this will be a very good signal for the crypto market. With assurances being made on both sides of the agreement, crypto traders in those areas will be able to breathe a sigh of relief and feel comfortable in investing.
Most crypto trading occurs by buying with a local currency and recently, EU and UK traders have been getting less value for their crypto because their respective currencies are weaker. In other words, they are having to spend more than ordinary to get crypto and if a deal does go through, the same amount of money in a couple of weeks’ time will buy a lot more crypto.
That is best case scenario.
No Deal Brexit and Crypto
If no deal can be reached the economic outlook of both the EU and UK in the short term will not be very good. This is because despite land masses and appearances, the UK is responsible for a lot of trade with the EU and EU nations rely on UK technology, especially around defence technology. The UK is also a massive importer and buys a lot of EU produce which would again take a massive knock.
All of this leads to a gloomy financial outlook and investor confidence in these areas might be dented. The crypto market will also suffer in the event of no deal because traders in the UK and EU will not have as much buying power and may hold off buying and selling altogether until the landscape settles.
The Repercussions of Brexit Will Be Felt on Crypto Worldwide
All of this comes at a bad time economically with the dollar already trading lower because of the ongoing impeachment proceedings against President Trump as well as a trade war with China that is still causing difficulties. Throw in the economic uncertainty of Brexit and the crypto market has been rather stagnant of late and is in a bit of a lull after the Bitcoin scam fiasco earlier this year.
In the event of a deal it could be the right kind of stimulus to turn the market around and provide a nice end to the year and bring in some lovely Christmas returns.
In the event of no deal being reached it will likely cause a further downturn in the crypto market.
Right now, it really is a gamble, but taking a bit of a risk could really pay off for Christmas if Brexit outcomes are favourable.