Brexit Does Not Stop Bitcoin’s Growth in the UK

By: Submissions

The only thing that is certain in the UK right now is uncertainty, and this is causing fluctuations in the stock markets, as the British public awaits the ‘deal or no deal’ Brexit outcome with bated breath.

Despite the tumultuous and unprecedented period of change we are in, the value of cryptocurrency has not stopped growing. From Bitcoin to Ethereum and countless other cryptocurrencies that are now available (well over 1,000, and new ones being created all the time) the cryptocurrency market continues to grow, comparatively unhindered by current ructions in the Eurozone.

While many businesses keep their powder dry and await the Brexit outcome, cryptocurrency and blockchain start-ups achieved record breaking growth in 2018. The UK is currently dominating growth in tech start-ups across Europe, with £2.29 billion in total venture capital, exceeding that of Germany, which had £1.38 billion, and France, which had £1.03 billion.

The reduction in growth forecast for the Eurozone suggests that the global economy is anticipated to slow down considerably. Failure to reach a resolution over Brexit will undoubtedly cause some anxiety among investors. Slow progress on the US trade agreements with China is also believed to be impacting negatively on global markets. In such circumstances those wanting to invest may well be weighing up what other options are on the table, and some may want to buy bitcoin as a potential alternative to more conventional stock market investments.

HMRC Crypto Asset Guidance

As interest in Bitcoin and other cryptocurrency investments grew exponentially in 2017/2018 while the Bitcoin bubble was getting bigger, HMRC has now published guidance in cryptocurrency tax, or “crypto assets” following on from the “UK Government’s Crypto Assets Taskforce’s Report” published in 2017.

The guidance relates to gains and income generated from digital and technological assets, but only applies to individual and personal holdings, and as yet there is no guidance published that is specifically aimed at businesses. This is expected to be published at a later date.

The new guidance aim is to simplify the process of reporting taxable crypto assets. It aims to help investors get to grips with how to pay tax on their holdings, and how cryptocurrencies are categorised for tax purposes. Instead of treating it as money, HMRC splits out cryptocurrency into three different types of token; utility, exchange, and security.

The newly-published guidance only relates to exchange tokens. These are tokens purchased with the intent to gain value and sell at a later date, and should therefore be subject to capital gains tax at the point of sale.

If an individual receives cryptocurrencies as payment from an employer, this should be subject to National Insurance and tax as a salary would be. HMRC raises the point that crypto asset exchanges may have ceased to exist by the time a person’s tax return is due, therefore it is critical that people who invest in cryptocurrencies keep a good paper trail of all their transactions for tax purposes.

Growth of BTC ATMs

With the growth of Bitcoin, we are also now seeing a growth in the number of ATM machines that support this popular cryptocurrency, as the UK now houses 214 Bitcoin ATMs, 134 of which are in the capital. London also plays host to the largest Bitcoin investors and enthusiasts meet up group, with 2,311 members, demonstrating a massive support network for cryptocurrency in the city.

Bitcoin ATM’s can now also be found in other cities across the UK too, including Liverpool, Derby, Brighton and Manchester, and we are likely to see more of them springing up in other British towns and cities in the future. The ATMs allow investors to trade, buy or sell Bitcoins, and also enable shopkeepers to exchange Bitcoin for goods in their shops.

BCB ATM, the company that supplies Bitcoin ATMs, hopes to be able to transfer money internationally via the machines in the near future, therefore enabling them to compete with large players such as Western Union money transfer.

There has been some impressive gains for Bitcoin seen recently, as the Independent reported a rise of 10% in the value of Bitcoin in December 2018. Those who invest will need to ensure they keep their coins safe and secure. Experts recommend storing bitcoin or cryptocurrency in a private wallet with a unique recovery seed, rather than on an exchange that may be at risk of hacking. The seed is a series of randomised words that should be kept somewhere secure, such as written down and put in a safe, so you will always be able to access your wallet. 

The evidence is clear that Bitcoin, and cryptocurrency in general, is growing in awareness and popularity as well as in value, and is being used more widely now by organisations such as Microsoft, Subway and Expedia. Cryptocurrencies are even being created by local Councils in the UK now as a means of ensuring the local economy stays healthy, assisting people who need financial support, and helping local independent businesses compete with larger retailers.

Like any investment, the value of Bitcoin and other cryptocurrencies can fluctuate, and those who buy need to keep a close vigil on the cryptocurrency market in order to make gains, but for those who do, the rewards could be significant, and as Brexit market uncertainty continues, cryptocurrency could be worth considering.  

By Jamie

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