In today’s Exponential Investor:

  • The 12 Days of Christmas UK Political Edition
  • Four ways to become a cryptoassets hub
  • Adding rocket fuel to the fire

Cast your mind back to April 2022…

Seems like a lifetime ago.

In many ways, it was.

Since then, we’ve seen three different prime ministers, four different chancellors, three different home secretaries, and two monarchs.

Sounds like the 12 Days of Christmas UK Political Edition… and it’s not even Christmas yet!

Back in April, as the UK was adjusting to a freedom of existence that we hadn’t really been used to for the better part of two years, the government was doing what it could to go “pro-growth”.

One of the more interesting aspects of this was when the (then) chancellor, Rishi Sunak, declared that the UK would become a global cryptoasset technology hub.

No kidding.

Sunak, in the government release which you can read in full here, said,

It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.

We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.

This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.

Whilst it’s very important to take anything a politician says with a grain of salt, this was a very clear and definitive statement.

Of course, this somewhat fell by the wayside as Sunak led a coup to oust then Prime Minister Boris Johnson, thereby losing his job as chancellor, only to have his tilt at the premiership snatched by Liz Truss, herself ousted not so much by a coup but by sheer tomfoolery, only to take up the position himself.

So, the pro-cryptoasset hub wannabe Sunak is now in the top job as PM and, from all accounts, the plan to make the UK a “global hub for cryptoasset technology” is still very much on the cards.

Or, at the very least, it’s still on the government’s website.

Four ways to become a cryptoassets hub

We won’t beat about the bush here, the idea of the UK being a cryptoassets hub is political grandstanding.

If you’ve been at all interested in the crypto sector at any point in the last ten years, you might have noticed that the UK is already quite the hub for cryptoasset technologies.

What’s really is holding it back, however, is a confusing, often complex and very contradictory regulatory environment.

There are no clear rules of the road within which crypto-focused businesses should operate. There’s certainly a booming crypto industry, but you end up finding that, while there’s plenty of activity, the domiciled residence of many crypto businesses is elsewhere.

That could change. But a number of important steps will be required to get there.

  • The first is a regulatory framework that provides some consumer protections.
  • Also, a framework that prevents the incumbent traditional financial institutions (read: the banks) from blocking users as they enter the crypto world.
  • Third, greater clarity as to how crypto business can fit into accounting and reporting standards within the UK.
  • Finally, incentives for businesses to domicile in the UK (read: tax breaks, grants and access to capital).

This is not an exhaustive list, but it’s a pretty good start. In short, you could probably surmise that these steps more or less pull crypto businesses into line with the opportunities and level playing field that you might find with start-ups and innovative technology companies.

Believe it or not, if the UK does become this cryptoassets tech hub, the already prominent position of tech investing globally will be amplified.

Adding rocket fuel to the fire

While not exactly globally renowned for its “tech” hub stature, the UK is actually fairy well known for its innovation and development. In 2021 (peak Covid remember and a few PMs ago), start-ups in London raised a whopping £25.5 billion. The only cities in the world that beat that figure were San Francisco, New York and Boston.

Today,  the UK tech industry is estimated to be worth in excess of £1 trillion.

That’s quite the “tech hub” already.

Some calculations put the total value of the cryptocurrency market at over US$34 trillion by 2027. If the UK is to become a cryptoassets hub, that’s a fairly sizeable market to tap into.

Not only does it have the potential to fuel economic activity in the UK, but it will add jobs, contribute to growth, and quite possibly help drag the country out of a recession.

Ponzi scheme this is not, but it is a real-world, economic opportunity to add rocket fuel to the fire of tech that’s already burning brightly here in the UK.

It may be difficult to see that future. After all, crypto asset prices have cratered in 2022. Perhaps you’ve seen your portfolio plummet during this crypto winter.

But, let me tell this. Right now, you’re in the midst of the biggest opportunity you’ll ever see in crypto markets. We are in a crypto winter. And the single best chance to mint a fortune is right in the depths of the winter trenches.

It’s the hardest move to make, but has the potential to unlock the biggest, most astonishing rewards of your life. But not just on a whim and a prayer: you need to make smart moves, see where the smart money is already going and then get ahead of it, and now.

Check out my latest briefing, which explains why this is just like 2019 on repeat, where the big money is moving already, and how you can unlock my three “Crypto Winter Kingmakers” that I believe will skyrocket out of this crypto season.

Check it out here.

Of course, only time will tell whether the UK can become this cryptoassets hub. There’s clearly a recession in the wings, inflation is still running hot, and the markets remain terrifying.

But a little forward vision, an understanding of the crypto market and how it moves, and just the tiniest hope that Rishi really is “pro crypto” and… well… who knows, this difficult, scary time might end be over sooner than people realise.

Until next time…

Sam Volkering
Editor, Exponential Investor