Brexit Archives

Why Ireland’s growing Blockchain ecosystem might replace London as the Fintech hub?

Posted on January 24, 2017 | by [email protected]

When it comes to Fintech innovations, London has always been the central hub for Europe. With an evolved Blockchain ecosystem that has partnered with various Financial Services firms that span across Nations London has been pretty active on the Blockchain space. But with the Brexit blues lingering in the hindsight, the set up now looks lagged and out of sync with rest of the world. Owing to this, Dublin and Ireland look poised to take over as Europe’s Fintech hub with a host of companies offering innovative solutions centered on Blockchain. Let’s dive deep into the country’s Blockchain disruption potential:

Brexit’s effect and PwC Survey:

Post UK’s decision to leave Eurozone, a PwC survey found that ‘Dublin’ would top the list of Attractive financial centers in Europe. Ireland is already a center for innovation on many technological fronts in the European continent that hosts many influential European Tech companies. With Blockchain technology being the core of many innovations of the decade, start-ups in Dublin have already started working on improvising the tech to form a user friendly Blockchain ecosystem. With one leg already in core analytics and consulting, Dublin might as well prove out to be the next Fintech hub for Europe.

Irish Government’s support and Influence:

Dublin’s Grand Canal Dock area, now dubbed ‘Silicon Docks’, are the European headquarters of Google, Uber, Amazon, Airbnb, Facebook, LinkedIn and Twitter. IDA Ireland – the governmental agency is responsible solely for attracting foreign direct investment in the country. It has worked to provide tax breaks, logistical support and other incentives to create a favourable environment for businesses. The evolution of the strong tech industry that exists in Ireland today owing to years of consistent efforts put in by the Irish Government. The stage has been aptly set up for the confluence of technology and finance.

Private companies strengthen the web:

Many private companies have been keen to invest in finding solutions through blockchain. From Institutional Investors to companies, everyone has invested in Bitcoin and Blockchain based solutions out of Ireland. Pioneers amongst those would be Deloitte, who established the first Bitcoin ATM in the area. Following up, it has been instrumental in the Blockchain ecosystem development by organizing Blockchain Hackathon. The company has partnered with ‘Bank of Ireland’ to deliver real time solutions basing on Blockchain for identity management and post trade processing. Many other consulting and solutions based firms like PwC and Chainsmiths have contributed to the cause.

Why 2017 can turn out to be very positive for Bitcoin

Posted on January 4, 2017 | by [email protected]

Bitcoin has had a strong start to 2017 with the trend looking strong enough to break the all-time high set in 2013. 2016 has been a positive year for the cryptocurrency with the currency showing an increase of $460 during the year. Most investors have resorted to use this digital asset as a portfolio diversifier and it has proved out to be a winning gamble. Fundamentally this was a well thought out move and it payed off with good dividends. But the question lingering in the minds of many Bitcoin enthusiasts and investors is how these strategies and Bitcoin would fare in 2017. Let’s look into few reasons why we believe Bitcoin would continue to weather the terrain to outperform assets:

China and the East step up the game:

China has always been a major price and volume driver for Bitcoin. The Yuan trading volumes observed a major uptick towards the year end owing to the Chinese Government’s announcement of imposing capital controls over Bitcoin. While this might happen sometime late this year, people are now actively moving funds out of the country at a very quick pace. This avalanche might last for a good amount of time into 2017.

With Japan abolishing sales tax on Bitcoin, South Korea encouraging Bitcoin and Blockchain accelerators and India’s demonization prompting for a cashless Indian society, the contributing prospects from the east only look stronger.

Eurozone’s loss would be Bitcoin’s gain:

The staggering effect of Brexit this year was evident when the European markets collapsed while Bitcoin soared mid-year to trigger a bull run. This quick transfer of funds into a digital unrelated asset has been the defining aspect of 2016’s Bitcoin Bull Run. In the face of Geo-Political crisis Bitcoin has replaced Gold as the safe hedge. With Eurozone still wobbly with impending debt and banking bail outs, cryptocurrencies seem to be a safer option for investing and hedging.

With Italian banking bail outs, Spain’s growing recession, ongoing crisis in Greece and post effects of Brexit, 2017 would see heavy activity in Bitcoin owing to the European continent.

USA’s growing adoption levels and the Trump factor:

The regulation of cryptocurrencies has been a hot topic in the US senate in 2016 and has seen some implementation in major states. With Trump’s policies aligned with major changes required to accelerate Fintech industry, adoption might reach higher levels in 2017. With thoughtful regulation and strong backing, mainstream adoption looks very viable in USA which would drive prices significantly in 2017.

Summing up, 2017 looks very positive for Bitcoin and Blockchain with the cryptocurrency all set to reach new levels of penetration.

Global investors watch out for Italian referendum, Bitcoin to get the push?

Posted on December 4, 2016 | by [email protected]

The European region has always been a major Bitcoin market mover in times of economic or political crisis. This is evident from what happened with Brexit this year. The pre-Brexit tension and the post-Brexit shocks caused turbulent economic times for European residents. The Brexit from EU caused Bitcoin prices to spike up considerably and make it the safe haven against the adverse market reactions. December 4^th can witness a similar push in Bitcoin prices as EU will witness Italian referendum. While market is waiting to for what might happen, let’s look into the dynamics of the referendum:

Italian Referendum:

On December 4^th, the global markets should be prepared for an economic tremor as Italy prepares for a referendum. The Italian citizens would vote on changing resolutions to amend constitutions. This also involves absolving the power given to State, Parliament and Bureaucrats. The sale of Italian government bonds and securities has been on the rise anticipating the crisis. Italy currently has eight troubled banks currently that tank if the referendum doesn’t turn out in favor. Adding to the tension, Prime minister Matteo Renzi declared that he will quit if people vote against the resolution.

Impending market chaos:

The aftermath of the controversial referendum can be disastrous as Italy is one of EU’s biggest debtors. Owing to bad lending practices, the country’s borrowing has led to financial instability as many banks are under heavy pressure now.

Financial Times reporter Rachel Sanderson stated,

“Italy’s banks have €360bn of problem loans versus €225bn of equity on their books after successive regulators and governments failed to tackle a bloated financial system where profitability was weakened by a stagnant economy and exacerbated by fraudulent lending at several institutions.”

How the markets will react to this would surely be of interest for all global investors.

How Bitcoin will react:

If the Italian referendum goes sour, it could mean investors could turn to possible uncorrelated assets such as bitcoin and Gold. Just before the Brexit vote, Bitcoin spiked to $675. As soon as the decision became public, global stock markets began to plunge. However, gold and bitcoin values went up significantly as investors turned to safer hedges. Just one week before the vote took place, the San Francisco-based exchange Coinbase saw a 55% rise in British registrants. After the vote was out, it was noted that a 350% increase in UK sales of Bitcoin. Even during the fears of possible ‘Grexit’- Greece Exit, there was good increase of volumes of Bitcoin. Basing on these historical observations, it is very possible that we might see something similar during the referendum.

Bitcoin and Brexit

Posted on July 18, 2016 | by [email protected]

On June 24, 2016, immediately after the final Brexit vote was publicized, the pound sterling plunged to its lowest level since 1985; conversely, the US dollar and the Japanese yen rose to new levels.

It’s telling, though, that the price of bitcoin actually rose 6.5% in the 24 hours after the results of the Brexit referendum became publicized. Bitcoin had already been up 25% prior to the vote for reasons not directly related to Brexit.

Clearly, those who jumped in to bitcoin to drive up the price were looking for an alternative to conventional currency during a time of political unrest.

In that role, bitcoin performs much like gold – an uncorrelated asset to which traders flock during times of geopolitical uncertainty. According to Coinbase data, the Brexit movement had a positive impact on bitcoin prices even before the referendum. In the week just before the vote, Coinbase, which offers a well-known bitcoin wallet and a bitcoin exchange, encountered a 55% increase in new account applications and a 350% increase in bitcoin purchases from the UK.

On the day of the referendum, the anticipation of Brexit affected bitcoin purchases before the actual vote, and Coinbase saw an 86% increase in UK signups. One Coinbase official observed a similar reaction with bitcoin when it served as an effective safe haven against the debt morass in Greece, and the capital regulations in China.

Founded in 2012, Coinbase now has 4 million users and operates in 32 countries. It launched in the UK only a year ago, and is making it possible for Brits to buy bitcoin in pounds, euros, or dollars.

Bitcoin and China

China is attempting to outdo the West in bitcoin activity by making large investments in server farms and carrying on immense speculative trading on Chinese bitcoin exchanges. In fact, Chinese exchanges account for 42% of all bitcoin transactions in 2016, according to a Chainalysis report commissioned by The New York Times.

Just last week, the giant Chinese internet company, Baidu, along with three Chinese banks invested in the popular American Bitcoin company Circle.

Again, we would like to emphasize the effectiveness of a combined bitcoin/gold investment. Gold, of course, is a traditional risk-off safe haven for investors and traders looking to protect their wealth against the uncertainty of paper assets. Bitcoin, on the other hand, presents an excellent speculative opportunity for an investor looking for aggressive upside return. The combined bitcoin/gold strategy can be especially effective since the digital currency and the yellow metal are both non-correlated assets.

The current market cap of all bitcoins is now $10.7 billion.

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