Blockchain.com CEO says US default will hit crypto in short term

The global economy is closely watching the situation in the US regarding the potential increase in the debt ceiling as the country faces the looming possibility of default.

The implications of such a standard are still being speculated, with various sectors, including cryptocurrencies, predicted to be affected.

Interestingly, opinions remain divided about the potential impact on the industry. 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 25 May.

But in a long-term perspective, Smith expressed a more optimistic view.

He suggested that a standard could initially trigger a pullback in the crypto market, but would eventually lead to a rally.

“A US default or a US recession is probably bad for crypto. Because they’re a risk asset, and people want to take risk, I think over a long horizon. They’re probably good for crypto. So one of the strongest price moves we’ve seen this year was when US banks started to fall. I think if the US government defaults, we’ll probably see a quick pullback and then a strong upward push in the crypto market,” he said.

Possible solution to the debt ceiling

The director noted at the same time 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 American politics, which is described as strongly 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 July deadline and a default occurs, Bitcoin could reach nearly $50,000.

As negotiations over 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 protect against such a crisis, he recommends investing in assets such as gold, silver and Bitcoin.

Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.