What is the Brexit exactly?
The British withdrawal from the European Union, often shortened to Brexit (“British” or “Britain” and “exit”) has been a political goal since the United Kingdom (UK) joined the European Union (EU) in 1973 and is a right of EU member states under Article 50 of the Treaty on European Union.
On 23 June 2016, a referendum on the country’s membership was arranged by the UK parliament and on the morning of 24 June the United Kingdom had voted to leave the European Union 52% to 48%.
Could the Brexit hamper Japan’s efforts on EU deal?
Britain’s historic decision to leave the European Union could hamper Japan’s efforts on a trade deal with the EU as well as its relationship with Asian and other global partners, analysts said.
The comments Friday came as the government in Japan described its disappointment at the exit, and British expats in Japan also reacted in shock and general disapproval.
Trade minister Mikio Haya-shi told reporters on Friday that Britain’s decision “may make it hard” for Japan to reach an economic partnership agreement with the EU by the end of this year.
The Vice Foreign Minister Shinsuke Sugiyama expressed his regrets over the result: “Japan and the U.K. share fundamental values not only from the perspective of trade but also politics and security,” he said. “There will be some impact on Japanese businesses but we have to watch and see,” he added.
But, Japanese people wanting to study in the U.K. should go now given the expected depreciation of the pound, though they should hold off until the situation stabilized.
What does this mean for Bitcoin?
Before and after the brexit has been voted for, we saw traditional currencies like Euro, US Dollar and British Pounds plummeting and people who were afraid of the fluctuations in capital markets were looking for assets that don’t have a correlation to capital markets.
Bitcoin is this asset because it is not a legal currency and no interventions by central banks could effect the Bitcoin price. Many investors now prefer the digital asset because it isn’t influenced by central bank policy.
The Bitcoin price
After a two-and-a-half year high on June 17 of $774.94 it dove 21% earlier this week. Even though there were suggestions the volatility could be tied to the UK finally leaving the European Union the price of Bitcoin began to rise again, up to high of just days after a price plunge of 20 percent left Bitcoin with a weekly low of $550.
The cryptocurrency, envisioned by early Bitcoin adopters as a way to gain freedom from the influence of central banks and financial institutions, rallied along with gold and the yen as the referendum result took markets by surprise and has been traded alongside the U.K. referendum as a strategy to avoid perceived official manipulation.
Bitcoin was clearly one of the few winners out of the U.K.’s vote to leave the European Union, surging as much as 13 percent as the decision fueled demand for alternative assets, according to data compiled by Bloomberg.
Why is China important?
Bitcoin moves are often counter-linked to the yuan because the majority of trades come from China, with about 68% of exchange volume distribution (bitcoincharts.com). On friday the yuan dipped after Britain voted to leave the European Union and hit a five-and-a-half-year low, while the price of Bitcoin jumped to a high of around $680.19, according to Coindesk.
We are seeing trading volumes almost $100 million traded in the past 24 hours, it’s two or three times compared to a slow day,” says Bobbly Lee, chief executive of BTCC, one of the largest Bitcoin exchanges in the world based in China.
Also, this week on the same wednesday as the referendum in UK, Circle payment app announced two related milestones: a $60M strategic financing from a syndicate of major Chinese strategic investors; and the formation of Circle China, a new Beijing-based company focused on bringing the benefit of open, global, blockchain-powered social payments to Chinese consumers.
Chris is a Bitcoin fan and meetup organizer currently based in Kaohsiung, Taiwan. When not working on his laptop earning bitcoins, he can be found skateboarding in Central Park, organizing language exchange meetups or painting at bodypainting parties. He’d love to hear from you. Feel free to reach out at email@example.com or @t3chn0m4d.