Updated Dec 25, 2020
The onset of Brexit saw an immediate reaction to Bitcoin prices GBP trading because the Bitcoin to GBP exponentially rose.
Consequently, the GBP significantly weakened against all other currencies because of the uncertainties surrounding the United Kingdom’s exit from the European Union (EU). Since then, the price of BTC has been steadily soaring after the Brexit-related events.
That is why it is essential to try and figure out the correlation between BTC and Brexit’s price movements to give traders some more in-depth insights to make informed decisions when participating in BTC GBP trading markets.
Learn About Price Movements of BTC in history.
The only evidence that BTC prices have always been experiencing spikes in times of economic and political uncertainty when participating in Bitcoin to pounds trading is looking down through the memory lane.
Good examples of events that saw the price movements of BTC move interestingly were the 2015 Greek debt crisis and 2013 Cypress bank bail-in. The same price shifts got also experienced when the UK made a surprise vote to exit the EU during the 2016 referendum.
However, it was not surprising that among the most traded currencies, the Bitcoin BTC to British pound GBP pair got rallied even more since the GBP value plummeted to a 31-year low compared to other currencies.
Bitcoin to GBP | BTC price reaction against the Brexit dates
What is more interesting for forex market players who are keen on monitoring the BTC GBP Bitcoin price is how they react following Brexit dates.
Apart from the aggressive price movements after the vote to leave the EU in June of 2016, there’s a series of exciting reactions follows:
- October 2, 2016: BTC prices did not react when the UK’s Prime Minister Theresa May announced that the UK would initiate the formal process of exiting the EU come March 2017.
- March 29, 2017: BTC interestingly rallies by 2% when the UK triggered Article 50 to initiate the process that got set to be completed by March 2019.
- November 25, 2018: BTC made a significant jump of 7% when the EU approved a withdrawal deal that got agreed with Britain impending approval by the British Parliament.
- January 12, March 12 and March 30, 2019: BTC did not react when the British Parliament rejected the proposed Brexit deals.
- April 11, 2019: Not reaction from BTC when the EU and the UK agreed on extending the deadline to October 31.
Bitcoin to pounds | Bitcoin Prices GBP Comparison
A comparison of the search terms BTC and ‘Brexit’ for Google News Searches, you will be able to observe that there were several spikes in the search numbers for thee terms at one particular time for the last three years.
However, it is essential to note that the correlation between Brexit and BTC prices movements was one-to-one. Because the search demand for BTC was especially massive in the later months of 2017 while the search for Brexit increased in the early days of 2019, this was the time when all the details regarding the exit of UK from the EU were supposed to get completed.
A clear indication that many investors were looking at the conversion exchange rates for Bitcoins to GBP to understand Bitcoin to British pounds Sterling trading better because there were instances of uncertainty surrounding the UK’s exit from the EU.
Growing correlation with Bitcoin prices GBP Trading
Even with the gains, BTC made in the Great Britain markets; they coincided with the GBP losses against other currencies with most of them witnessed around October 11 and 12.
That is why to would be least likely for mainstream investors to consider BTC as a hedging instrument during the Brexit uncertainty. The probability of BTC striking more gains in the future looks better with noted market analysts and the EU forecasting the probable extension for the Brexit deal.
Brexit Impact on Bitcoin to GBP Trading
The UK’s vote to leave the EU will have far-reaching consequences that fiats may find challenging to bear. Being the most prominent contender among fiats, BTC will find a safe space with such volatility.
Since the BTC has been in a safer zone than other fiats, sceptic cases have to get curbed with the prices of BTC doubling in correlation with gold.
Ultimately, people will get tired of investing in an economy whose currency is losing its strength. The result is the foreign markets will put restrictions on your goods.
People will move to BTC instead of losing their funds while storing them in GBP. The decision gets majorly based on the level of risks and benefits that are associated with hedging such assets.
From the correlation analysis, it is evident that the price of BTC aggressively reacted to the outcomes of the referendum vote especially depicted by the correlation between BTC prices, Brexit announcements and the Brexit Google Search Trends.
Bitcoin prices GBP trading players that seek to place bets on the correlation between BTC GBP Brexit could profit by positioning themselves strategically ahead of the Brexit dates.
However, for long-term investors, this correlation should have no bearing in the long haul investment decisions since the short-term volatility caused by Brexit will not likely have a significant effect on the price developments of BTC in the long-term.
Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.
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