Bitcoin seems unsure of what to do next with the currency at about $10,000 for the past two weeks and arguably kind of sidewaying since June.
It has gone up a bit to $14,000, down a bit to $9,500, but it seems most comfortable with $10,000 where it is currently trading.
There are many reasons why the currency is behaving as it is, but it does at times correlate with Chinese Yuan (CNY) as well as British Pound (GBP).
CNY has fallen to its lowest level in a decade, at now 7.16 to the dollar, amid devaluation to counteract US tariffs.
In addition, protests continue in Hong Kong, which could affect the Chinese economy as plenty of international companies enter it through Hong Kong.
All this may effect the economy, so markets are selling CNY with usually some of it sold for bitcoins.
From the chart, it looks like this might be heading for 7.2, with 7.4 another resistance, meaning we should have expected $14,000.
Bitcoin tried it twice, but maybe it got a bit ahead of itself. So tried going down, and there too it was rejected. Hence now is sitting at $10,000, waiting for the market to make up its mind.
One reason might be that while CNY is falling, so bitcoin should rise, the pound is rising, so bitcoin should fall, the two so keeping it in a straight line.
Pound’s fall until 12th of August was due to Boris Johnson, the unelected British Prime Minister, making it clear UK was out, deal or no deal.
On or around 12th of August, some potential remain alliance is revealed with all sorts of Libdem plans to stop no deal.
Fearing red could become irrelevant, Labour’s leader Jeremy Corbyn throws in a spanner, opening a row of sorts with libdems.
What markets see in all this is attempts to stop no deal, so they accordingly adjust pound’s price, with it up a bit again today as Boris becomes marginally more optimistic about a deal following G7.
Nothing substantial has come out of it however, probably because Europe can’t really negotiate with someone who is unelected and has a majority of just one.
“If we did introduce a time limit – or even if we got rid of the backstop altogether from the Withdrawal Agreement, as Boris Johnson says he wants us to do – what would be the point? The prime minister doesn’t have the majority in parliament to guarantee the Brexit deal would then go through and we, the EU, would have sacrificed our principles, our reputation, exposed our single market on the island of Ireland and thrown member state Dublin under a bus voluntarily. We’d be worse off than if we just accept a no-deal Brexit is going to happen,” one high level EU diplomat says.
One option might be to suspend parliament, which he has ruled out for September, but has kept open for October.
Such action however is extremely unlikely as parliament is supreme. Thus the only real option is an election, most probably to be called in now weeks with the vote to be held just a day or two before the EU summit on the 17th of October.
The Constitutional Election
Corbyn has stated he will vote for an election if Boris tables it, so it is probable the 2/3rds required to call an election before the five year terms ends will be perhaps easily reached with any MP that votes against it probably losing his or her seat because how on earth do you vote against democracy.
Polls in general suggest the public wants an election, and even by “feels” the country is already in election mode, so the polls are coming.
When we say lies, lies and compounded polls, we mean it because for years now they haven’t called one election right.
You can see above just how badly they’ve predicted results, but they do show general changes in mood or opinion.
They also do lie, and sometime perhaps intentionally so due to conflict of interest in selling to hedge funds the more accurate results, or so is alleged anyway.
But the above does show that plenty can change during an election, with potentially a three horse race that may lead to surprising results.
In particular, it is difficult to call who independents will go for as the constitutional question of leaving or remaining in EU is a difficult one.
Labour has plenty of leave seats, so getting their voters out in those seats might be difficult for them as they’re now trying to court the remain vote. In remain seats, however, they have a clear option in libdems. So it’s difficult to see labour’s way to power, but who knows. This is no ordinary election.
Libdems could by some miracle, but they would need to offer a home both to labour and conservative voters, a difficult task. Even if they become the official opposition, however, that would be an earthquake in British politics.
Boris knows the country because he used to be out there all the time cycling up and down like an ordinary brit.
He certainly can win, and perhaps even with a landslide, as he is popular and he does bridge divides due to being a liberal conservative.
His economic plans would probably be good for bitcoin and the country, with his apparent stated friendship towards EU maybe putting some at ease.
Yet much can change and much is unclear, but if he won, it wouldn’t be a calamity and may actually be good both for Britain and EU. The calamity here would be not calling an election prior to exiting as that would deny the British people the right to decide and thus would probably court punishment especially by independents when the election does come. Plus it would be very stupid because he can’t command parliament.
So from an economic perspective, whatever the outcome where the EU is concerned, it would probably be better than no deal and if it is no deal, it would probably be in name only.
If labor somehow wins, then no one has a clue what they’d really do regarding the EU, but economically there would be a lot of nationalization, probable tax increases, and they haven’t said much about cryptos but they probably wouldn’t be cheerleading it.
If libdems somehow win, then there would be a two speeds Europe of the euro area and those not in the euro area with something like it already happening whereby France and Germany are merging, paving the way for the rest to join.
If Boris wins, then Britain becomes a bit more distant from Europe, but probably still pretty close, with UK probably getting closer to US as well as Australia.
The question of just how close to the EU would still continue, they say for decades, with that question going on within EU as well regarding how close they want to be with each other.
UK would lose access to the European market at least to the same extent as now, but negotiations would probably continue for a decade regarding just how much access it can have.
Americans and Australians have been keen to open negotiations themselves with UK, but those too would probably go on for years.
Temporary agreements may however be reached with all three, as well as other countries, and close military cooperation to almost a merger with France will probably also continue.
So in many ways it is probable that little will really change except Brits won’t have the right to live in EU and vice versa. Nor will they be at the table, with EU becoming for Britain sort of what US is now. A very close and special relationship with UK less able to say no, but sometime can do just that.
One important aspect is that UK would no longer be some sort of gateway to EU, but just to what extent that applies is to be negotiated.
Meaning much remains unclear, including whether there will be a no deal exit, but as summer starts to give way to autumn, the pound might find a clearer direction, contributing perhaps to bitcoin making up its mind.