The worldwide economy is closely monitoring the situation in the United States regarding the capacity boost of the debt ceiling as the country faces the looming likelihood of default.
The implications of such a default continue to be speculated, with numerous sectors, including digital currencies, projected to be influenced.
Interestingly, thoughts on the capacity impact on the industry remain divided. Reports by Blockchain.com CEO Peter Smith, a default would negatively impact the cryptocurrency space in the short term, keeping in mind that this scenario, along with the threat of a fall, would be detrimental to digital assets, he said during Bloomberg’s Qatar Economic Forum on May 25.
Nonetheless, taking a longstanding perspective, Smith expressed a more optimistic view.
He suggested that a default could at the beginning trigger a pullback in the cryptocurrency market but would sooner or thereafter lead to an upward surge.
“A United States default or a United States fall are probably bad for cryptocurrency. Because they’re a danger investment, and people want to take danger off, I think on a long horizon. They’re probably good for cryptocurrency. So one of the strongest price moves that we’ve seen this year was when United States banks started failing. I think if the United States Government defaults, we’ll probably see a quick pullback and then a strong push upward in the cryptocurrency market,” he said.
Possible solution on the debt ceiling
Simultaneously, the executive pointed out that there is a high probability that a solution will be found to raise the debt ceiling. He believes a solution will be according to the perception of the present state of United States politics, which describes as highly entrenched.
On the other hand, Geoff Kendrick, Head of FX Research at Standard Chartered, sees a possible default as a positive element for Bitcoin (BTC) (BTC).
According to Finbold, Kendrick thinks that if the debt ceiling is not raised by the estimated deadline of July and a default occurs, Bitcoin (BTC) could accomplish nearly $50,000.
As negotiations regarding the debt ceiling continue, market commentators are seeing as potential assets that may be a cushion in a crisis.
1 notable voice is Robert Kiyosaki, the author of our trending personal finance book ‘Rich Dad Poor Dad.’ Kiyosaki has stated the situation as “bad comedy” and believes the United States is bankrupt. To safeguard against such a crisis, he recommends investing in assets such as gold, silver, and Bitcoin.
Disclaimer: The content on this site should not be considered financing advice. Investing is speculative. And once investing, your financial resources is at risk.
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