Debt Crisis Threatens Crypto Investors as USA Faces Cash Crunch

Debt Crisis Threatens Crypto Investors as USA Faces Cash Crunch

The United States debt crisis may cause a significant decline in Bitcoin within a few days, warns Coin Telegraph’s Marcel Pechman, as the government rapidly exhausts its funds and risks a government shutdown, default, bankruptcies, and stock market crashes.

The  United States hit its maximum debt limit of $31.4 trillion on January 19. Treasury Secretary Janet Yellen has cautioned that if Congress fails to raise or suspend the debt ceiling, the country may face a cash shortage by June 1. Reaching the debt ceiling suggests that the Government cannot borrow additional funds. 

Impact of The United States Debt Crisis on Bitcoin 

Coin Telegraph’s Marcel Pechman hosted a show that discussed the impact of the  United States debt crisis. As the Government rapidly exhausts its funds, there are concerns. Pechman implies that the Government can potentially resort to displaying desperation, aiming to frighten the public into pressuring Congress for a debt ceiling increase. The  dangers include a potential Government shutdown, default, bankruptcies, and stock market crashes as individuals rush to sell assets for cash.


In this situation, Pechman implies that Bitcoin (BTC) may experience a whole lot of decline of 40 percent to 80 percent during  several  days. Nonetheless, there is one critical factor to consider: why would investors keep large cash positions once the situation has stabilized? The moment the Government increases the debt and establish more money, the value of the debt instantly falls.

How Will Cryptocurrency Investors Be Impacted?

Reports by Pechman, this news should at the beginning worry Bitcoin (BTC) and digital currency investors because the younger audience plays a whole lot of role in driving demand for these assets.

Potential Consequences

If the  United States fails to raise the debt limit on time, it  can potentially have severe consequences. Americans may not receive important Government payments such as Medicare advantages, Social Security checks, tax refunds, and payments to Government employees. Furthermore, the country’s unemployment price could boost by 4%, reaching up to 9%, if the  challenge remains unresolved.

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Furthermore, it  can potentially likewise affect the worldwide financial markets and the financial security of numerous families and workers. Consequences may include a decline in the country’s creditworthiness, leading to higher interest prices. Critical financing for public health, pandemic response, Government food assistance, and veteran advantages may be disrupted. In addition, investors in the stock market would face direct consequences from a potential default.

Likewise Read: Bitcoin (BTC) Live Rate: Top Analyst Reveals Bitcoin Price Action For The Next Weeks – Coinpedia Fintech News


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