The global economy is closely monitoring the situation in the United States regarding the potential rise of the debt ceiling as the country faces the looming possibility of default.
The implications of such a default continue to be speculated, with various sectors, including cryptocurrencies, projected to be affected.
Interestingly, opinions on the potential impact on the industry remain divided. According to Blockchain.com CEO Peter Smith, a default would negatively impact the crypto space in the short term, noting that this scenario, along with the threat of a recession, would be detrimental to digital assets, he said during Bloomberg’s Qatar Economic Forum on May 25.
However, taking a long-term perspective, Smith expressed a more optimistic view.
He suggested that a default could initially trigger a pullback in the crypto market but would eventually lead to an upward surge.
“A US default or a US recession are probably bad for crypto. Because they’re a risk asset, and people want to take risk off, I think on a long horizon. They’re probably good for crypto. So one of the strongest price moves that we’ve seen this year was when US banks started failing. I think if the US government defaults, we’ll probably see a quick pullback and then a strong push upward in the crypto market,” he said.
Possible solution on the debt ceiling
At the same time, the executive noted that there is a high probability that a solution will be found to raise the debt ceiling. He believes a solution will be based on the perception of the current state of US 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).
As reported by Finbold, Kendrick believes that if the debt ceiling is not raised by the estimated deadline of July and a default occurs, Bitcoin could reach nearly $50,000.
As negotiations regarding the debt ceiling continue, market commentators are considering potential assets that could be a cushion in a crisis.
One notable voice is Robert Kiyosaki, the author of the popular personal finance book ‘Rich Dad Poor Dad.’ Kiyosaki has described the situation as “bad comedy” and believes the US is bankrupt. To safeguard against such a crisis, he recommends investing in assets such as gold, silver, and Bitcoin.
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