The US government faces a crucial deadline on 1st June to reach an agreement on raising the debt ceiling or risk triggering a catastrophic wave in the US and global economy. But what would this mean for Bitcoin? If the US defaults on its debt, it is speculated that this could lead to a surge in Bitcoin’s price.
Some individuals have anticipated the stock markets to crash if the government fails to raise the debt ceiling, leaving investors searching for alternatives. In response to such an event, Bitcoin could potentially benefit from an exit-fiat bid. Messari founder Dan McArdle has recently shared his thoughts on Twitter, suggesting that he previously believed a US default would result in a temporary Bitcoin crash due to ensuing chaos and liquidity crunch. However, he now thinks that Bitcoin could catch the exit-fiat bid it deserves, especially considering its response to previous bank failures.
Traditional finance investors may start viewing Bitcoin as a safe haven during uncertain times. For instance, at the beginning of this year, when banks were collapsing one after another, Bitcoin held its ground relatively well, instilling confidence in investors considering moving their funds to cryptocurrency.
Standard Chartered’s head of digital assets research, Geoff Kendrick, also weighed in on the matter. He told Insider that a US default, which he refers to as a “low-probability, high-impact event,” could cause Bitcoin to jump by about $20,000, an increase of nearly 70% from current levels. Furthermore, Kendrick has also predicted that Bitcoin could reach $100,000 by the end of 2024, signaling the end of the “crypto winter.”
Bloomberg’s latest Markets Live Pulse survey has named Gold, US Treasurys, and Bitcoin as the top three assets to consider should the US fail to raise its debt ceiling and default on its debt. As the deadline approaches, it is essential for investors to conduct thorough market research before making any decisions within the cryptocurrency space. It is worth noting that the author’s opinions may be influenced by market conditions, and neither the author nor the publication hold responsibility for any personal financial losses incurred.
Source: Coingape
