Binance has opened a new exchange in the self-governing UK dependency of Jersey. The exchange allows users to buy Bitcoin and Ethereum with British Pounds Sterling and Euros. Binance CEO Changpeng Zhao says that the company has been overwhelmed with new user requests and KYC registration. Some are drawing a connection to Brexit, the uncertainty of which may be driving a new bevy of investors into the world of virtual currencies.
Brexit represents many things, but none more to the average person than financial uncertainty. Some analysts say that a No-Deal Brexit (which, in recent days, has been looking increasingly likely) could result in a 25% value crash for GBP. But no one really knows. There has never been anything resembling the UK’s divorce from the EU in modern times. The economic impact for the UK could be dire.
Though Bitcoin is volatile in its own right, its independence from any national currency market makes it look like an attractive alternative to nationalised currencies. Just as Venezuelans moved to BTC from the Bolivar when the latter inflated more than 1,000,000% in a single year, UK citizens are eyeing cryptocurrencies as a hedge, just in case the worst should come to pass.
Binance Jersey’s rapid growth is especially conspicuous in today’s depressed crypto trading environment. By some measures, Bitcoin trading volume is only 4% of its height in early 2018. Binance isn’t adding customers at a blistering pace through its Hong Kong exchange. It’s reasonable to assume that Brexit really is having an impact, driving UK customers into digital currencies. That Binance Jersey is also a fiat onramp is surely a factor, but UK customers already have alternative fiat onramps like Coinbase exchange, so this can’t be the only explanation.
Investors signing up to Jersey’s Binance exchange don’t seem to be put off by the uncertainty of UK markets. Image: gerasimov_foto_174/Shutterstock.com
A No-Deal Brexit would be the kind of civilisation-altering event that would put Bitcoin to the test. Is this a true international currency that can bring wealth stability to its users, in a way that localised fiat currencies cannot? Fiat currencies, of course, work nicely when all is well. But no one knows what will happen to the Pound (or the Euro, for that matter) once Britain steps away from the international trading bloc. Problems will be compounded if it does so without a deal.
These events occur just as Bitcoin is beginning to seem scarce. Of course, Bitcoin is divisible to 8 places, but due to loss and lock-up, it is estimated that only about 17 million people in the entire world will ever be able to own an entire Bitcoin. There simply aren’t any more BTC to go around.
Bitcoin scarcity, combined with market-driven fear of missing out (FOMO) in the UK, could boost Bitcoin significantly within this calendar year. Nothing is ever certain with cryptocurrency, but to say that we’re watching this story with interest would be putting it mildly.
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