The British Pound Struggles after Brexit
The value of the British Pound has been extremely volatile ever since the Brexit vote, causing major changes throughout the world. Those who voted Yes or No to the referendum were affected by the value of the Pound dropping over night and the chances of it stabilizing anytime soon has many looking for other currencies to store their hard earned money in.
Anyone earning British Pounds in 2016 has started noticing the cost of living in the UK rising with the higher inflation that political instability always brings. While it may not be as dramatic as Venezuela’s hyperinflation crisis, holding onto the British Pound during inflationary periods isn’t a good idea, since the rate of inflation (increased prices for food and housing), aren’t predictable by the average citizen.
Historically, the stock market or Gold have been places to put money and see a decent return, compared to a savings account at least. The trade wars making headlines, and Britain leaving it’s largest trading partners, has made the stock market potentially more volatile than Bitcoin has been over it’s short history.
The price of Gold has at least been more stable since the Brexit vote than the Pound has been as a store of value.
Bitcoin over the British Pound
While the “volatility” factor of bitcoin cannot be overstated, the argument for bitcoin being a better store of value since the brexit vote, couldn’t be more clear than the price (available on CoinMarketCap for anyone to view)
As you can see above, throughout 2016 the cost of an entire bitcoin (%’s of bitcoin can be purchased obviously), was under $1,000 USD and currently the price of 1 Bitcoin is only $6,623 USD.
Bitcoin has done more for British citizens that purchased it during 2016 than Boris Johnson, Nigel Farage and Theresa May have done combined. This is because the British Pound has dropped in value since the Brexit vote and Bitcoin has increased in value since that time. Unlike a British politician, Bitcoin cannot be programmed to care about the people who buy or sell it.
Timing Bitcoin Purchases Correctly
So what would be the right time to buy bitcoin in the UK to avoid a huge loss?
Bitcoin was NOT invented to make people rich, unlike many crypto currencies that have come and gone since Bitcoin was invented. Offsetting inflation and having “some” money in an asset that central bankers can’t manipulate should be a bitcoin purchasers goal. If your goal is to make money, follow alt-coins and hope you get lucky with one of the pump and dumps starting daily. If you are looking to store value, in a decentralized currency, bitcoin has what you need.
There are certain times, long after bitcoin has “crashed” that the average person can make an uneducated guess, that the value of bitcoin will not go below (or above) 10-20% in the near future.
This might sound counter intuitive to some, the short term gains or loses are not what bitcoin purchasers generally think about. If money being put into bitcoin is only supposed to “store value” for 5, 10, 20 years time, the immediate return or loss of buying bitcoin should have no effect on a buyers decision.
Who will Value Bitcoin in the FUTURE?
Since Venezuela was a huge adopter of bitcoin to offset hyperinflation, will other countries follow in the years to come?
Will Venezuelan’s adopt a new currency or remain with bitcoin as a better store of value than the inflation central banks offer?
Will people in India still value bitcoin as a better “store of value” than the Rupee their central bank prints?
India’s central bank removed the 500 and 1,000 note Rupee’s, you may recall, with 2 months to deposit the notes into the bank before they became worthless.
Will the Yuan gain “investors” from the USD, GBP and the Euro markets, or still be considered under valued to take investors away from USD?
And what about Russian’s trying to avoid the Ruble’s devaluation over the last few years? The government has been dealing with the currency crisis, while Russian citizens have to consider a better way to store money, like bitcoin can offer.