Will the BTC price be affected if the US defaults on its debt?
The Treasury Secretary of the States Janet Yellen raised concern about the potential risks of the US debt default recently. The question arises will the BTC price be affected if the US defaults on its debt?
KEY TAKEAWAYS
- Bitcoin may benefit from the situation if the US defaults on its debts.
- the investors will look at options that are not government dependent.
Yellen warned Congress of the possibility of mass unemployment, payment failures, and overall economic turmoil if the US defaults on its debts. Even though it has become a norm to raise this issue every few years. However, Congress still raised the debt limit recently to protect them from any consequential upheaval.
Unfortunately, the Government does not have much support on its side as they don’t have a majority. Thus the opposition is completely manipulating the situation to push their demands. The Republicans are pressurizing President Joe Biden to abandon $4.5 million worth of projects and also let go of student loans and avoid hiring Internal Revenue Service employees.
As it may sound unsettling but Bitcoin may be expected to benefit from this event. The US debt default may turn the situation bullish for Bitcoin. Defaulting would increase the liquidity in the markets and thus raise the adoption of digital assets like Bitcoin. Since, at that time it will be a more appealing option to invest in assets that are not dependent on the government.
Defaulting on debt for the US government could lead to an economic downturn and a loss of faith in traditional financial institutions. Driving investors to other options like Bitcoin as it is decentralized.
Bitcoin is considered the gold of the digital world and is often seen as a safe haven asset. Specifically in times of economic turmoil and with the increase in liquidity as a result of the debt ceiling increase