Bitcoin briefly fell below $8,000 today, dropping in the past week from about $8,500 on falling volumes.
Zoomed out, however, bitcoin has been sidewaying for the past three weeks at around this $8,000 range.
This slight fall coincides with a significant jump in the value of the pound amidst intense negotiations on Brexit.
Pound has jumped above $1.28 from $1.22, making it a 5% increase in its value against the dollar since last week.
This big jump is in anticipation of a potential withdrawal agreement which would leave the UK in the EU for another two years when a free trade arrangement can potentially be reached.
Such agreement would avoid a potential no-deal showdown, although parliament has taken that off the table with the British government now saying they would ask for an extension if an agreement can’t be reached.
Markets however may have priced-in potential pressuring of any member states to veto an extension as Boris Johnson, the Prime Minister, is adamant UK is leaving on the 31st of October deal or no deal.
An agreement therefore would take out some uncertainty, but it would have to pass parliament with the stumbling block being customs arrangements in Northern Ireland.
Boris Johnson has suggested the use of decentralized technology, by which he presumably means a blockchain, in a somewhat complex design where checks happen in ports, but just what rule is applied to goods is determined by the surveillance of lorries etc., to see whether they’re for the Northern Ireland market or that of Ireland.
EU presumably expects Johnson to move quite a bit on that, but NI’s unionists political representatives, DUP, are in number 10 with all these parties in frantic negotiations.
They’re all saying a deal is possible, with Libdems moving to secure a final say referendum, but just what would go down if talks break is not clear.
Except that in that case the pound would probably sharply fall, and bitcoin would maybe even sharply rise, with it not very clear actually if bitcoin has been reacting a lot earlier than the pound perhaps in part because it is a lot less liquid than forex markets, so it can move noticeably on relatively little fiat.
If bitcoin is being some sort of early canary, then it would suggest the real chances of a deal are probably very slim, but there’s a chance, somehow.
We should know very soon, probably later today in time for Newsnight on whether the current prime minister can do any better than the last one.
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