What does Liz Truss’s resignation mean for Bitcoin and Sterling?
The sudden resignation of the Prime Minister today has sent ripples of positivity across the markets where the pound has risen and crypto appears unmoved.
Liz Truss took to the lectern outside 10 Downing Street this afternoon following an almost portentous meeting with the influential 1922 Committee chairman Sir Graham Brady. She delivered a 90-second speech of resignation.
Within the hour, the pound was rising in response to the definitive conclusion of the remarkably short term of a Prime Minister who became the ephemeral figurehead of a disastrous period in the UK’s financial history.
Truss’s 44 days at the helm of British politics exposed a weakness in the pound that few had anticipated. A weakness that some experts are now identifying as having a potentially positive effect on Bitcoin and the wider cryptocurrency markets.
One such expert – Dr Martin Hiesboeck, head of blockchain and crypto research at digital asset platform Uphold – believes Liz Truss’s resignation will open the path for Rishi Sunnak to return, a move he expects will see the pound rally.
“This is mostly in part to the fierce backlash against her economic plan, with her resignation sparking recovery for UK markets,” he explained.
“The US dollar has been the clear winner for the last few months as investors seek shelter in the largest global economy in a time of war. Yet, only time will tell if investors become more willing to go long on the pound given her quick resignation.”
Dr Hiesboeck added that crypto markets had held up surprisingly well during Truss’s tenure, partly due to investors not viewing traditional finance as an assumed safe haven.
“In some ways, Bitcoin and the rest of the digital asset market are giving us hope that there is somewhere to put cash in times like these,” he said.
“Nevertheless, Liz Truss’s resignation won’t automatically change the negative outlook for the UK, so it’s a good time for other investment vehicles to diversify their portfolios with digital assets.
“The UK’s crypto future may seem now in limbo, however we believe that personal leadership is less important here than constructive dialog and the creation of a favourable framework for digital assets and we do not see the new government trying to stand in the way of progress. On the contrary, with energy prices putting a strain on government finances, it is imperative to modernise Britain’s financial system.”
It’s a view shared by Alan Vey, Chairman and founder of London-based enterprise blockchain Aventus.
“The PM’s resignation will undoubtedly have ramifications for the tech industry, particularly within the crypto space,” he said.
“The lack of action, vision and support given to the digital assets industry by Liz Truss and her cabinet during her short time in office was certainly a cause for concern. Perhaps most importantly, the increasing value that resides in the digital domain calls for proper regulatory methods to protect consumers – this resignation brings renewed hope that the next person to fill the post will at least make some strides towards regulation in this arena.
“The new PM will need to work with the government and regulators to ensure they are keeping up with this fast-growing and highly complex industry sooner rather than later, and it’s crucial that political changes like this one don’t hamper its momentum.”