Bitcoin users ride wave as Brexit sends price soaring

The United Kingdom’s vote to leave the European Union has been bad news for people who have significant holdings in pounds, but it has been a welcome development for bitcoin holders, including some in Missouri.

The decentralized digital currency has gained a foothold in Missouri, and now bitcoin holders in the state may profit from global economic instability.

After the vote for a British exit, or Brexit, the pound dropped 8 percent against the dollar overnight. By contrast, the value of bitcoin rose Friday by 9 percent, to $650 from $550.

This is not the first time bitcoin has thrived during an economic crisis. The currency saw similar spikes after the during the Greek Debt Crisis in 2015 and after the Cyprus bailout in 2013.

Missouri users ride wave

Christopher Rico is the president of the St. Louis Bitcoin Users Group, which has about 290 members. He and his business partner, Scott Wootton, also run a bitcoin-based business that operates bitcoin kiosks in the St. Louis area.

As a software developer, Rico became interested in bitcoin back in 2010. He liked the idea of currency that is not controlled by a central government or a bank.

Rico wasn’t surprised to see bitcoin’s value skyrocket after the U.K. referendum.

“Every time when prices go up, people become interested,” he said.

Rico predicts the value is going to climb even higher in the near future because the number of new bitcoins being created will soon be cut in half. The St. Louis bitcoin community is planning a party July 10 to celebrate the event.

Outshining gold

With investors buying up bitcoin in times of turmoil, some have suggested the digital currency is replacing gold as the emergency investment du jour.

A recent article on Seeking Alpha said the U.K. vote “was Bitcoin’s first real moment in the sun because the price of BTC appreciated more so than gold (on a percentage basis).”

The article calls gold an “old school” asset and asserts bitcoin is a “new school” asset.

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