Bitcoin price surges on Brexit victory

2016-06-24 08:59
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Mike Caldwell, a 35-year-old software engineer, holds a 25 Bitcoin token at his shop. (Rick Bowmer, AP, file)

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London - Bitcoin was one of the few winners out of the UK’s vote to leave the European Union, surging as much as 13% as the decision fuelled demand for alternative assets.

The digital currency jumped 11% to $681.68 as of 13:45 Hong Kong time, according to data compiled by Bloomberg. The price had plunged 20% in the four days through Wednesday as bookmakers’ odds projected victory for the campaign to keep Britain in the EU, and ether, another cryptocurrency, declined after a reported hack.

Bitcoin rallied along with gold and the yen as the referendum result took markets by surprise, sinking equities to emerging-market currencies.

Some buyers may prefer the digital asset because it isn’t influenced by central bank policy, and Friday’s selloff could spur further action from monetary authorities, said Peter Rosenstreich, head of market strategy at Swissquote Bank SA.

“Bitcoin has been trading alongside the UK referendum,” Rosenstreich said by instant message from Gland, Switzerland. “I don’t think it is a traditional safe-haven trade but a strategy to avoid perceived official manipulation.”

Early bitcoin adopters envisioned the currency as a way to gain freedom from the influence of central banks and financial institutions. Total global supply of bitcoin is capped at 21 million.

Read more about: currency  |  bitcoin  |  brexit