The Brexit will continue to dominate media headlines for the coming days. This also gives us exciting options to draw parallels between Bitcoin and traditional finance. Whereas the global stock markets lost US$2tn due to the Brexit, Bitcoin has stood firm and not buckled despite some minor blows to the gut. Gold and government bonds have soared, but real investors will look to diversify even more.
Stock Markets And Fiat Currencies Plunge
It is not the first time the global economy feels the brunt of political decisions. One could argue the recent financial crisis was a culmination of different political decisions which spelled doom for us all. The Brexit, although taking part in Europe, is sending shockwaves throughout the rest of the world.
Mainly investors were caught by surprise, as the majority assumed the UK would vote to say. Pools indicate older generations of Britons voted to get rid of the EU, directly affecting financial futures of younger generations. The Pound Sterling took a severe plunge after the results were made public, and it is doubtful any significant recovery will be achieved anytime soon.
Safe-harbor assets have seen an increased interest from investors all over the world. Gold, silver, and even government bonds are becoming hot commodities once again. In the case of precious metals, that is not surprising in the least. Scarcity has always been a driving factor for value in traditional finance.
Stock exchanges, on the other hand, are clad in a sea of red. Losses were noted all across Europe, ranging from 2.5% to 8%. All of these negative numbers will further hurt the global economy, driving us into a deeper recession than ever before. Political agendas aside for a minute, the Brexit outcome could end up being the worst decision the UK has made since World War II.
Bitcoin, interestingly enough, did not drop in the last. Albeit the value took a few blows throughout the day, the overall value of Bitcoin did not drop significantly. In fact, there was a drop right before the Brexit voting, and the majority of lost ground has been made up once again. The European market is holding on tight, whereas the US market is seeing a bit more sideways action.
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