Tether (USDT) CTO Paolo Ardoino stated the possibility of a potential United States default is low as it would have “catastrophic” consequences for the United States economy.
“I think this thing with the capacity United States default that, by the way, I do not think will happen — I mean, it would be catastrophic for the United States economy,” Ardoino stated, on The Scoop podcast. “I think everyone is sitting tight to monitor what’s going on and what will happen.”
Ardoino discussed what events may be a catalyst to shake things up in the market, where liquidity has dried up. He pointed out that while Bitcoin (BTC) has rebounded from below $20,000 to around $27,000, there’s a bit less space for more volatile assets more traditionally because interest prices are ramping up. He also mentioned that people are leaning toward having a 5 percent yield that’s more certain.
“So you can see that overall, even though Tether (USDT) grew in market capitalization, you see the entire crypto stablecoin market as a sum it went down I think 23 percent from the all-time highs because ultimately people prefer to sit on their dollars and earn interest on it, and so that likewise leaves less space, less liquidity to essentially reinvest that liquidity in the cryptocurrency markets,” he said.
On the other hand, he put forward one possible optimistic path forward. “And so it’s kind of multi-factor, but definitely if we are starting to see the United States inflation numbers going down, if the Fed will stop ramping up the interest prices, I believe that we will be in a situation where the markets will start healing, not just the cryptocurrency market, the market in general,” he said.