March 29, 2019, | AtoZ Markets - One of the companies engaged in market intelligence has recently shared results of the Brexit impact on cryptocurrencies.
Brexit impact on cryptos might be surprisingly positive
According to data collected by the fintech company’s analysts, about 62% of surveyed analysts believe that the upcoming Brexit impact on cryptocurrencies and on the market for digital assets will be positive. The fintech company analysts believe that post-Brexit Britain is likely to have friendlier crypto regulations. Almost 44% of analysts believe Brexit would not affect crypto regulation in the UK. 74% of all respondents, according to the analytical company, consider cryptocurrency as an addition to their portfolio.
Some respondents believe Brexit will have no impact on cryptos
It is noteworthy that almost 20% of surveyed analysts believe that Brexit impact on cryptocurrencies will be equal zero. A recent survey of British citizens showed that confidence in cryptocurrency is low and interest is relatively high. This may change if government policies have a serious negative impact on the financial life of the British. For the same reason that Bitcoin thrives in times of economic turmoil, hard Brexit without an agreement is likely to have a positive impact on the cost of cryptocurrency.
Brexit economic impact was significant
According to the Bank of England, since the decision in 2016, about 800 million pounds a week are lost from the economy every week. Over the same period, the British pound (GBP) lost 5% against the dollar and 10% against the euro. Although, the analysts emphasize, that outside Brexit influence the pound constantly fluctuates in relation to other currencies. However, a steady loss in this range should have a definite reason, and many respected economists believe that the decision on Brexit is the main factor.
The global financial firms getting ready to the Brexit
According to the company analytics, at least 275 financial companies have left London, while many other firms are restructuring their European operations in preparation for the independent UK. London remains one of the largest financial centers in the world, but its status may change if Brexit affects access to nearby European markets. Brexit has a positive impact on Germany and Ireland. Many hedge funds have moved to Dublin, and banks go to Frankfurt. Access to international markets, although might get more difficult and more friction can occur. As a result, people can choose cryptography as a hedge against the decline in the value of the pound sterling, and for its usefulness in cross-border transactions.
The Brexit agreement is a never-ending story
Most analysts also believe that the current term for the Brexit will pass, but will be extended. That, however, is not a surprise. This week, the House of Commons of the British Parliament once again did not support any of the eight alternative approaches to Brexit submitted to a rating vote. Parliament could not formulate a general approach that could force Teresa May’s cabinet to change its strategy.
The UK withdrawal from the EU process is still unclear
Now, obviously, the third vote on an agreement with the EU will be on the agenda. The third vote itself remains problematic: the Speaker of the House of Commons insists that the same proposal cannot be put to the vote more than once in a parliamentary session. But even if the Tories figure out how to get around the speaker’s ban, the approval of the May plan is not guaranteed: the North Irish Democratic Unionist Party refused to support it. Only one thing is known for certain so far: before April 12 there will be no Brexit in any form, because the parliament officially postponed its date from March 29 to April 12. According to the company, the most likely scenario, with a probability of 82.75%, is that the deadline for the Brexit agreement will simply receive an extension.
Brexit scenario probabilities
On 14 March, the company shared the calculations of the likelihood of different Brexit scenarios based on responses from decentralized analysts:
- 19.10% chance that a negotiated deal between the UK and the EU would be in place by 29 March;
- 22.50% chance that a no deal Brexit will happen by 29 March;
- 69.58% probability that a second referendum will be passed in parliament by 29 June.
No-deal Brexit will delay regulatory development in crypto space
Under a no deal scenario, withdrawing from the EU would lead to a repeal of the ECA. This would effectively remove 17,105 legal instruments across many areas of law, thus creating serious complications for the UK legislative system. Some forecasters believe that regulatory development in innovative technology, such as cryptocurrency and blockchain, could be effectively delayed for the next 2–5 years. According to the experts, there is a small chance that the British government will simply reject the will of the people and remain a member of the EU. Most analysts believe that such efforts will not receive the necessary support from members of parliament.
Please share your thoughts with us in the comment box below.