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Brexit, The Aftermath
Market Insight – Foreign Exchange –Brexit, The Aftermath
Markets blindsided
Brexit, The Aftermath After a week of tracking increasingly optimistic voting polls, financial markets have been caught off guard by the surprise decision of the British public to leave the European Union. At the time of writing, the primary victims of the decision to leave have been European equity indices and the Sterling, both of which have experienced sharp falls in the 6-12% range. Conversely, traditional safe haven assets like gold have climbed as investors seek a store of value amongst falling risky asset prices (see Figure 1). The actual economic impact of the vote will not be known until a new relationship is agreed between the UK and the EU, a negotiation process that could span years and has an array of potential outcomes. Therefore, we believe uncertainty is likely to remain an integral feature of financial markets for some time to come, making sentiment a key driver of returns going forward. The main factors that we believe will drive confidence in the near term are the selection of a competent successor to David Cameron and the degree of anti-establishment support on the continent.
Figure 1: Brexit rocks financial markets
Source: Bloomberg, ETF Securities, Intraday performance as of 24th June 2016
Confidence is king
Confidence in the ability of the UK to secure a beneficial trade deal with the EU will be vital in stabilising financial markets. After David Cameron announced his decision to stand down as Prime Minister this morning, focus turned to who his replacement would be and how quickly he/she would be installed. In our view, what is important to markets is the capacity for Cameron’s successor to unite the Conservative party and instil political stability. The more cohesive the leading party is, the more likely we’ll see a positive reaction from the Sterling and UK equity markets.
Anti-establishment contagion
A prominent risk for the EU is that the UK’s decision to leave fuels support for anti-establishment parties at a time where four of the largest countries in the monetary union face key elections in the next 15 months. Parties in France, Germany, Spain and the Netherlands have already gained momentum and this outcome could garner further backing. If calls for referendums in these states grow the stability of the EU will be threatened, which will likely be unfavourable for European assets.
Important Information
This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).
Dogecoin’s performance and staying power across multiple market cycles suggest it is not “just another one of those memecoins”.
Over the past decade, DOGE has outperformed even Bitcoin, delivering over 133,000% in returns, nearly 1,000x BTC’s gains in the same period. Despite deep drawdowns during bear markets, Dogecoin has shown remarkable structural resilience.
Following each major rally, it has consistently formed higher lows, a pattern of long-term appreciation and compounding strength.
Historically, Dogecoin has closely mirrored Bitcoin’s movements, often peaking a few weeks after. While 2024 saw Bitcoin dominate headlines following landmark ETF approvals, DOGE still followed its trajectory, though it has yet to stage its typical delayed breakout.
As macro uncertainty continues to fade and momentum returns to the market, retail participation is likely to accelerate, setting up conditions in which Dogecoin has historically thrived.
At the same time, regulatory clarity around Dogecoin has improved. The SEC recently confirmed that most memecoins are not considered securities, comparing them to collectibles. Additionally, they clarified that proof-of-work rewards, like those earned from mining DOGE, also fall outside that scope. These developments further legitimize Dogecoin’s role in the ecosystem, potentially setting the stage for its next paw up, especially as it now holds a firm base around $0.17, nearly 3x its pre-rally level before reaching a new all-time high in the last cycle.
In addition to its long-term performance, Dogecoin stands out as an asset that behaves asymmetrically, offering investors a rare source of uncorrelated returns across both traditional and crypto portfolios. With an average correlation of just 15% to major assets, DOGE’s price action remains largely detached from broader macroeconomic trends, reinforcing its value as a true diversification tool.
Dogecoin demonstrates significant independence within the crypto market, with its correlation to Bitcoin at only 31% and to Ethereum at 37%. This divergence stems from unique capital flow dynamics, where higher-beta assets like DOGE tend to rally after blue-chip crypto assets reach major milestones.
While Bitcoin slowly evolves into a digital store of value and Ethereum powers decentralized infrastructure, Dogecoin remains largely a cultural asset, thriving on narrative momentum and crowd psychology, offering explosive upside when risk appetite surges.
For investors seeking an upside without mirroring the behavior of core holdings, Dogecoin offers a compelling case. Its ability to decouple from market trends while tapping into more speculative surges makes it a powerful, though unconventional, addition to a portfolio with wildcard potential.
Research Newsletter
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
XENIX kommer att vara värd för XENIX ETF AWARDS för de nordiska länderna för tredje gången i maj 2025. Alla noterade ETFer och traditionella indexfonder som erbjuds nordiska privata investerare beaktas. XENIX ETF AWARDS Nordics är de ursprungliga nordiska ETF AWARDS för alla trackerfonder.
Datum: Tisdagen den 13 maj 2025
Tid: 16,30 till 20,30
Plats: Scandic Haymarket, Hötorget 13-15, 111 57 Stockholm
XENIX kommer att vara värd för ETF AWARDS för de nordiska länderna för tredje gången i maj 2025. Alla noterade ETFer och traditionella indexfonder som erbjuds nordiska privata investerare beaktas. XENIX ETF AWARDS Nordics är de ursprungliga nordiska ETF AWARDS för alla trackerfonder.
Baserat på en kvalitativ rating utvärderar XENIX ratingvinnarna i utvalda investeringskategorier, dvs. de bästa ETFerna och trackerfonderna. Dessutom uppmärksammas innovativa ETF-nykomlingar och index, och specialpriser delas ut för anmärkningsvärda bidrag till vidareutvecklingen av indexerings- och ETF-marknaden.
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Henrik Norén, Nordicus
Dr. Markus Thomas, XENIX
Thomas Kettner, MarketVector Indexes
Roberto Gisy, Savr
Marco Antonio, Kaiko
Wieland Thyssen, XENIX
Christopher Kock, Virtune
Emelie Moritz, Safello
Ytterligare information kan fås på info@xenix.eu eller +49 151 17 83 52 93 där anmälan också kan göras.
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