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The short-term effect of the US default will hit the cryptocurrency market, but then new capital will pour into the market, says the head of Blockchain.com
The US default is positive for the cryptocurrency market in the long run. This opinion was expressed during the Qatar Economic Forum by Blockchain.com CEO Peter Smith, writes Reuters.
He believes that the US crisis will hit cryptocurrencies first, as investors want to isolate themselves from risky assets. However, the market will soon see an influx of new capital, which will greatly raise quotes, the head of Blockchain.com believes. Smith added that despite a “painful” 2022, cryptocurrencies are already recovering this year. At the same time, 2024 will already be another “demonstrative” year for the crypto market. How much the market can rise, Smith decided not to specify.
We will remind, earlier US Treasury Secretary Janet Yellen warned that by the beginning of June the US could expect a default if the country does not raise the debt ceiling. The administration of US President Joe Biden is unhappy with calls to raise the ceiling by more than $30 trillion on Republican terms, writes Bloomberg.
However, Reuters found out that Biden and Republican Speaker of the House of Representatives Kevin McCarthy are still closer to an agreement to raise the national debt limit by two years. As part of the deal, the country will limit spending on most items other than the military.
- According to media reports, the White House wants to increase funding for the military and veterans, while maintaining non-defense spending at the same level. White House sources say the Biden administration is considering forgoing more funding for the Internal Revenue Service in order to hire more auditors and focus on wealthy Americans.
- However, the parties have not yet made a final decision on the public debt, Reuters notes. Media sources say there is still disagreement between the Biden administration and Republicans over nearly $70 billion in spending.
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