Yesterday markets were poised at a high prepared for the Brexit referendum vote that took place in the United Kingdom. UK markets were up before the vote and in the U.S. Wall Street was rallying with all three averages advancing upwards. Now the vote has ended with 51.9 percent of citizens voting to leave and 48.1 percent wanting to remain. Immediately after UK markets and the British Pound dropped severely. However, Bitcoin bounced back surging to a high of $683 per BTC after a two-day bear trap.
As soon as the vote was getting close to finishing as it was a very tight race, Bitcoin started rising upwards. The pound began to plunge before the end of the voting process and dropped to its lowest level since the early eighties. Markets outside of Britain that were open also started to feel the brunt of the Brexit storm as exchanges in Tokyo saw a downturn. Most hedge markets did well such as gold, some commodities, and now the new asset of the 21st century Bitcoin.
Clearly, some investors in the know had the intuition to move money into safe haven markets last night. It was obvious that after the Brexit was underlined by the vote, markets worldwide would begin to feel the heat. When London began trading banking, housing, and retail all took quite a tumble. S&P futures indicated a downturn in global markets. U.S. Treasury bonds are typically one hedge investors like to lean on, but also fell during the overnight after the announcement. Bureaucrats in London are also enraged with the decision such as David Cameron, who seems to be leaving his post as Prime Minister.
During all of this madness, the cryptocurrency Bitcoin saw increased volume from overseas and started an upward trajectory above its $540 USD low. As sovereign currencies especially the Pound Sterling drop we may see more crypto-activity as citizens who want to protect their wealth may look into assets such as Bitcoin. Alongside this Chinese cryptocurrency purchasing continues as volumes at Huobi and Okcoin are still at top levels. Currently at the time of writing Bitcoin rests at $663 with charts looking confident and renewed spirit has risen. The past couple of days the market witnessed a severe bear trap but analyzing the charts double bottom it looks like clear skies from here.
It is uncertain whether the Brexit vote will drive more citizens in the UK towards Bitcoin. However, what is certain is traditional global markets are going to feel a squeeze today and most likely within the currency and fiat sector. As markets open in the U.S. fear and uncertainty most likely will grip Wall Street as futures look dreary since the referendum. The decline of the Sterling and global equities may have been the catalyst that broke Bitcoin’s correction as the price reversal was parallel with the vote ending. The 24-hour candlestick chart shows resistance in the $700 USD barrier but could also see a low of $620 if the pace slows letting bears claw the price again. If outside markets have anything to do with the current boost its safe to say Bitcoin’s safe haven aspect has become well-known.
Source: Economist, CNNMoney, BitcoinWisdom, Trading View
Images: Crypto-graphics.com, and Pixabay