Financial analysts remain optimistic about the state of the
digital assets markets in the midst of Brexit. According to a new report by
Cindicator, a blockchain market intelligence startup, 63% believe that the UK
withdrawal from the European Union will have a positive impact on cryptocurrency
prices, and 74% are considering holding cryptocurrency in their portfolio,
along with other assets such as commodities, stocks and cash.
Compiled by Cindicator Analytics, a team of professional
financial analysts, and Cindicator’s analytical platform, the report summarizes
several key findings from a study conducted by the team to gauge the sentiment
of the community on Brexit.
The study found that financial analysts are confident that,
in the event of a hard Brexit, investors would turn to crypto as an alternative
to the pound and will search for ways to diversify out of it into other
currencies as well as store of value commodities.
They predict that businesses would experience rising costs
to conduct cross-border trade, which would eventually cause a downturn in the
financial markets. Investors would either invest in low-yield but reliable
investments such as bonds, or find opportunities in markets with growth potential.
In contrast, 18.5% of forecasters believe that Brexit will
somewhat negatively impact the crypto market, at least in the short term. This
would be especially true in the event of a disorderly Brexit, which would be
very damaging to the UK economy and its financial markets, and could trigger a
sell-off in the stock markets. The same scenario could play out in the crypto
markets in the short term, they said.
The study also assesses the sentiment of analysts on the
implications of Brexit on the regulatory landscape of cryptocurrencies. 47% are
optimistic that post-Brexit Britain could be inclined to take a progressive
stance towards cryptocurrency regulation and enable blockchain innovations,
which would increase the adoption rate of the technology.
They argue that without reliance on the EU regulatory
framework, the UK could independently decide the direction of its regulatory
approach to creating a more autonomous financial sector. In addition, with the
prospect of jobs being lost due to Brexit, the government could seek different avenues
to spur economic development and foster the innovation of new technologies.
Only a small population of forecasters (9%) believe that the
UK would adopt an unfavorable approach towards regulating cryptocurrency.
Bearing analysts predict “a massive capital exodus” with
businesses relocating away from the UK. A relevant example is US crypto
exchange startup Coinbase, which opened
a new office in Ireland in October 2018 as part of its Brexit