Why the UK general election result is bad for Bitcoin

The recent general election result in the UK doesn't bode well for Bitcoin, with strength now returning to traditional capital markets

The UK general election resulted in a landslide victory for the Conservative party, with a huge majority brushing aside all opposition.

The result caused the pound to rally to an 18-month high, with GBP now testing the critical $1.35 level of resistance.

As global currency markets respond to the resounding result, traditional hedges to the financial system like Bitcoin and gold may begin to stutter.

A renewed sense of confidence and optimism in major economies will undoubtedly cause a sustained rally in the stock markets while posing a negative outlook for cryptocurrencies.

Bitcoin spawned out of the 2009 financial crisis, with citizens understandably losing trust in traditional banks and turning to a decentralised safe haven.

However, as banks and traditional capital markets regain strength, Bitcoin has begun to languish, with the world’s largest cryptocurrency failing to eclipse its stunning all-time high of $20,000 from December 2017.

At the time of writing, Bitcoin is in the midst of a bear market that has been demonstrated by sequential lower highs, dwindling volume, and a lack of retail interest.

The exponential moving average death cross could well drive Bitcoin to yearly lows, with price targets being touted at $3,150 and $1,800.

A Conservative majority government will now most likely see Great Britain swiftly leave the EU in early 2020, which will mitigate against any uncertainty in the Eurozone and European stock markets.

Bitcoin needs another crisis in global politics and economics to see adoption and price rise substantially, although it remains unlikely with a potential trade deal between the USA and China still firmly on the table.

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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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