While Brexit is negotiating the terms of Great Britain’s trade relations and internal politics, the people of Europe have begun hedging their bets regarding the economic fallout. Most people, especially outside of Great Britain, see Brexit as an economic drag on the global economy. This sentiment is gaining traction in Great Britain as well. Many economists are pumping the brakes on doom predictions, but some of this is to avoid a panic.

Financial panics are what caused the Great Depression nearly a century ago. When confidence in bank’s holdings in the 1920s sank, a run on the banks ultimately resulted in the great depression. People rushed to the banks demanding cash. When confidence in particular currencies or institutions is lost people often shift their holdings to more conservative assets often cash or gold.

The dollar will certainly be strengthened against the Sterling Pound post-Brexit, because it is still considered the global standard and gold tends to have value even if current events cause it to fluctuate. Cash usually holds value even when it is fluctuating or sinking. However, in today’s economy, shocks and panics still move money and the post-Brexit fallout in the financial sector is magnifying concerns over the long term value of the Sterling Pound. Divesting in the Sterling Pound has been expected. What they’re moving their money into is a bit surprising, however.

Bitcoin has proven itself more reliable and stable as an alternative currency. Investors are flocking towards Bitcoin as investors in the past have bought gold. The new gold that people are flocking towards is Bitcoin, and this became evident as the Brexit unfolded. Confidence in Bitcoin is rising as the Sterling Pound is falling, largely because it is finite and decentralized. As the Sterling Pound suffers from an uncertain trade economy, Bitcoin is picking up the slack.

There are still many who are uneasy about the value and durability of cryptocurrency, but there are reasons why the value of Bitcoin has become trusted. First, we must understand that the intrinsic value of gold only exists in its usage in things like electronics and spacecraft. There is nothing inherently valuable about a shiny rock. In fact, it cost enormous resources to mine it out of the ground, refine it and typically put it back in the ground in vaults. This means that we don’t actually want the gold, we merely want the knowledge that it is there.

This is partially why when people want a conservative form of money they are now looking at Bitcoin. It is not tethered to institutions for its value and its use is digital, bypassing all of the normal frictions of currency and commodity.

Since Brexit, people, lacking confidence in the Sterling Pound have migrated to Bitcoin. The thought behind this is that Bitcoin is decentralized and therefore less susceptible to the fluctuations and reverberations that will accompany Brexit. Banks and trade economies are concerned with the implications of Great Britain having to negotiate trade terms among European partners.

The numbers tell the story. The day before Brexit, Bitcoin was valued at approximately $660. The Sterling Pound was valued and nearly $1.50. Now, the Sterling Pound is valued at $1.32. When we compare the currencies from several weeks ago the Sterling Pound was worth about a dollar and a half, while Bitcoin was trading at just over $200.

These currencies are going in opposite directions and it is because Brexit has destabilized the markets and there is currently more confidence in Bitcoin, than in the traditional currency of Great Britain. Besides being a modern, digital currency, Bitcoin is global, which allows it to withstand the shocks of particular regional economic forces.

This is remarkable because Bitcoin is relatively new and it’s main detractor is that it lacks legitimacy. By being used as a conservative alternative to cash, this shows that Bitcoin has arrived. It makes sense from the standpoint that this is the digital age and Bitcoin is a digital currency, but this phenomenon is certainly adding disruption to an already disruptive situation.