The world economy floundered Friday following Great Britain’s shocking decision to exit the European Union — but the bitcoin is proving that every action has an equal and opposite reaction.
Even as stock markets and world currencies flailed at the results of the Brexit vote, the bitcoin suddenly spiked in value, surging past $650, up $100 from the previous day (when it still seemed possible that the EU could stay together). Because apparently, the only thing people still have faith in is a virtual currency.
For perspective, as of Brexit morning, the pound went down 6.44 percent against the euro and 10 percent against the dollar. But bitcoin continued its upward trajectory, increasing 7 percent in the last seven hours of trading. At day’s end, the price of bitcoin had gone up 8.7 percent, and hit a high of $680.19, according to Coindesk. “We are seeing … almost $100 million traded in the past 24 hours, it’s two or three times compared to a slow day,” said Bobby Lee, chief executive of BTCC, one of the largest bitcoin exchanges, in an interview with CNBC.
Of course, bitcoin’s value is notoriously volatile, having recently plunged 25 percent following a two-year high on June 17, when it peaked at $774.94. Even with its latest surge, it hasn’t regained that foothold.
But as the fallout from Brexit continues, bitcoin experts say that the cryptocurrency can be ideal for offloading the British Pound. “With the EU referendum in the U.K. on Thursday, June 23, exchange rates are likely to be volatile. We’ve been putting plans in place so that your transfers continue to be processed as smoothly as possible,” TransferWise told customers earlier this week. Today, that seems like a wise decision.
That said, putting all your eggs in bitcoin’s basket probably isn’t advisable either, as the total value of all bitcoin in circulation today stands at just $10.6 billion. But hey, at least for cryptocurrency holders, there’s an upside to what seems to have been turned upside down.