Think the effect of Brexit and the upcoming American election will be limited to physical currencies? Think again.
UK-based market analyst Juniper Research forecasts the value of Bitcoin to triple this year alone to $92 bn up from $27 billion in 2015.
“Transaction volumes continued to be concentrated overwhelmingly on the exchanges, with Bitcoin now trading at values almost 50% higher than at the beginning of the year,” the firm said in a statement.
It’s now clear that markets are reacting to Brexit with uncertainty, but it seems this may extend to investing in what would appear to be currency that exists outside of the geopolitical sphere.
According to Juniper, political instability is leading investors to seek safe havens for their assets – Bitcoin’s price rose in weeks leading up to the referendum, dipped briefly and sharply when it appeared Britain would remain in the EU, but recovered when the results were announced.
Similar trends have been observed in China, where a slowing economy has led investors to approach exchanges.
Thirdly, since Bitcoin is in limited supply by design, the value increases naturally over time.
On the other hand, while the value of currency may not top everyone’s list of concerns in the event of a Trump presidency in the U.S., report author Windsor Holden expects that it will cause further spikes in Bitcoin trade late in the year.
“If Donald Trump becomes President of the US, there is the very real prospect of turmoil on world markets – the Economist Intelligence Unit ranks his Presidency within the Top 10 global risks,” he said in a statement. “However, Bitcoin trading would thrive in such an environment, at least until the impact on major fiat currencies becomes clear.”