Liputan6.com, Jakarta The United States (USA) is in a difficult situation due to the possibility of defaulting on the debt. This has historic consequences for global markets, which could have a major impact on Bitcoin, Ethereum and other crypto markets.
US Treasury Secretary Janet Yellen warned last week that the government will soon run out of money if the debt is not stopped or increased possibly by June 1.
If lawmakers remain deadlocked and can’t agree on spending, Washington won’t be able to implement the bill.
Under such conditions, what is the likely price movement of the crypto market? Especially for two big currencies namely Bitcoin and Ethereum?.
Amberdata Company Director Greg Magadini said that if the government fails to pay its debts, risky assets such as stocks and cryptos will face short-term problems.
He explained that this is because the decline in the quality of government-backed debt may increase borrowing costs, on the contrary, increase yields and strengthen the dollar compared to other assets.
Bitcoin Price May Fall
According to Magadini, Bitcoin and Ethereum may react differently in the event of a default.
“Bitcoin can bounce along with gold after being previously immersed as a cash check issued by the government while Ethereum is likely to remain depressed along with the technology reserve,” he said, quoted from Decrypt, Friday (26/5/2023).
Similar views are supported by Genesis’ Head of Business Gordon Grant, who told Decrypt Bitcoin has an advantage over Ethereum if the government can no longer meet its debt obligations, but both currencies will face pressure in the future.
“There may be initial weakness, if a risky asset is completely crushed, if the stock market falls. But Bitcoin will probably go up,” said Grant.
As for Ethereum, Grant said the second-largest cryptocurrency by market cap is often tied to indices that track tech stocks such as the NASDAQ, making it likely to underperform compared to Bitcoin if a default occurs.
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