A new poll by the Independent puts Brexit at a 10% lead over remain for the first time ever, sending the British pound tumbling down, reaching a low of $1.40 from $1.71 two years ago.
At the same time, Bitcoin has been on a year-long up trend after reaching a low of $160 in August 2015, seeing a stratospheric rise past $600 in a bull run.
Recession may be ahead
Most are suggesting China, which is facing its own economic difficulties, has been leading the charge, not least because at one point there was a $100 spread between Chinese and western exchanges. However, as economic uncertainties increase in the UK following what seems to be a rise in popularity for Brexit, wealthier Brits may take a flight to safety and hedge with Bitcoin or gold.
Experts are divided on the long term economic effects of both possible outcomes, but they all agree, including the leader of the Leave campaign Nigel Farage, that a break up would have negative short term effects, including a potential recession.
Schäuble: Out is out
Wolfgang Schäuble, Germany’s finance minister, who is seen as a key actor in German politics, stated that Britain would not be offered a trade agreement similar to Switzerland if the British people decide to leave. In an interview with Der Spiegel, the minister said:
“If the majority in Britain opts for Brexit, that would be a decision against the single market. In is in. Out is out. One has to respect the sovereignty of the British people.”
The ramifications of a Brexit could be drastic, argue the remain campaign, not only for Great Britain, but all of the EU as the noble political project devised after the devastations of the second world war is placed in jeopardy.
Germany specifically may be significantly worried. In an emotional appeal, Der Spiegel, one of the most read newspapers in Germany with a circulation of 800,000 daily, has issued a special edition at a reduced price and increased circulation in UK, with the cover: “Please don’t go!”
Choosing Asia over Europe
The main appeal of Leave is the ability to enter into trade deals with other blocks, such as China or India, which the EU prohibits for individual members, requiring such trade deals to be arranged at the EU level. As Brexit’s popularity increases, EU may offer concessions, particularly an opt-out for Britain to negotiate trade agreements. Similar to the significant concessions UK offered Scotland after independence gained a lead two years ago.
The Scottish people pushed back against the rising tide of nationalism across the western world, deciding to stay in a United Kingdom by a 10% margin. Whether the British people will likewise choose to stay in a United Europe remains to be seen, but the uncertainties over the next two weeks may increase demand for Bitcoin and other hard commodities across UK and wider Europe as an historical day nears.