Bitcoin Uncertainties: Brexit, Weakening Chinese Economy, Upcoming Halving
In this Edition of Bitcoin News, I want to talk about the possibility of the Bitcoin price raising due to a number of different events going on right now in the world. Bitcoin, just like every other currency out there Bitcoin is affected by literally everything that goes on in the world. It’s important to have a basic understanding of what affects not just bitcoin, but currency in general. On top of that, it’s important to understand why it affects it the way that it does. Why is it so important? Well, because whether you like it or not, this will affect in your daily life.
Bitcoin Uncertainties: What Affects the Value of Currency?
Exchange rates are determined by basic supply and demand principle. The demand for a currency is influenced by interest rates, economic growth, inflation, and many other factors. Bitcoin is not excluded from this. Even though it is technically a cryptocurrency.
Unlike every other currency out there, Bitcoin is not subject to monetary policy. Meaning a treasury or bank of some sort can’t just decide to drive the price up or down because they feel the need to respond to a particular situation. (Like some sort of economic or foreign policy event or condition). Bitcoin’s monetary policy is actually controlled by consensus. Meaning, The supply and price of Bitcoin is controlled by an algorithm that its operators can choose to modify.
Bitcoin is still in the very early stages of its market evolution. Supply/demand commodities exhibit high volatility in the early adoption phase. The exchange volatility of Bitcoin is exacerbated by the complex process and strong opinions regarding improvements that will eventually support increased transaction volume.
Bitcoin Uncertainties: The Brexit
One of the things that many are speculating will greatly affect the value of Bitcoin is the Brexit. WE have already seen glimmers of the past weeks with the mere announcement of the U.K.’s Succession from the EU. Bitcoin had already received some safe-haven bids in recent weeks, thanks to uncertainty about which way Britons would vote in the country’s referendum on its membership with the European Union (EU), which began on Thursday (June 23) morning.
Bitcoin Uncertainties: China’s Weakening Economy
The price of Bitcoin jumped 20% during the week of June 3rd, rising to its highest point in 20 months. But what was the cause of the increase? Mainstream media sources say that this sharp increase is a result to demand from the Chinese market, and the devaluation of the Yuen. Not everyone seems to be on the same page. Some market experts are saying that the rally was tied to other developments. Within and outside of the ecosystem the digital currency resides in. A spokesperson for Huobi, has a different theory. The spokesperson saw the movement as part of a series of stresses on the Chinese financial markets.
The developments in the Chinese markets regarding bitcoin seems to have started a debate in the bitcoin trading community. Many believe that that Asia-based exchanges are using illegal tactics to drive market activity. Petar Zivkovski, director of operations at bitcoin trading platform Whaleclub said, “The theory that the Chinese are buying bitcoin due to yuan devaluation is a nice story to tell, but is in our view incomplete,” he then added: “Bitcoin is a speculative asset and Chinese residents who are looking to preserve the value of their holdings can turn to USD or EUR, which are much more stable currencies.”
Bitcoin Uncertainties: The Halving
Bitcoin halving is a roughly once-every-four-year event whereby the consistent supply of bitcoin released is cut in half. When Satoshi Nakamoto released bitcoin in 2009, each block generated a reward of 50 BTC. On 28th November, 2012, the reward subsidy fell by half to 25 BTC. Satoshi added halving so that the code could continue to provide fresh bitcoins as the network scaled, but would also phase out the production of new bitcoin as it approached the maximum cap of 21 million. So there actually is a point to halving. It’s purely to maintain the original structure created by Satoshi.
Bitcoin Uncertainties: Future POTUS
This is purely speculation. This comes from a report that was basing all of their information on what certain polices would do if they were implemented. Like I said, everything affects the price of bitcoin. Let’s start with Donald Trump.
Trump, hasn’t actually said anything regarding digital currency. Bitcoin could easily become something that could hurt the Trump Administration. In light of Trump’s announcing that he would attempt to block remittances to Mexico from the United States. Blocking remittances is no small threat. The World Bank research reports, annual monetary transmissions into the region equal twenty-five billion dollars and roughly two percent of Mexico’s GDP.
Hilary Clinton is a bit of a different case. In a thread about Clinton and Bitcoin, users point out how odd it is of Clinton claiming to be “not a technical person” during her email scandal proceedings. Her strong anti-encryption stance is not what users of alternate money like to hear. An article from Tech Dirt opines says that “Weakening encryption undermines both security and privacy. … This raise serious questions about who is advising Clinton on tech policy.”
Gary Johnson, The Libertarian nominee is the only one who not only accepts cryptocurrency, but actually receives campaign contributions in Bitcoin. His openness to the cryptocurrency is not surprising at all considering his involvement with the Libertarian Party. Rand Paul also accepted Bitcoin campaign contributions. Smart idea, if you ask me. It didn’t help him at all, but good thinking, Rand Paul.
Bitcoin Uncertainties: Conclusion
It’s certainly an interesting road that we are on. The Bitcoin train, that is. We are literally watching history unfold. I hope you know that’s what is going on. Bitcoin is truly revolutionary. Check Our Reviews page for more insight into trusted companies. Check our site for other Financial Planning reviews. Its great place to become more knowledgeable about the world of finance, and will shed some light on some of the scams out there.