Speaking at the Qatar Economic Forum, Peter Smith, CEO of the U.K.-based crypto exchange Blockchain.com, has estimated that a potential U.S. debt default would first hit the crypto market. Smith said this possibility would initially create a pull-back trend in the industry before paving the way for an upward trend.
- The Blockchain.com CEO stated that if the U.S. defaults on debt, this would probably be bad for crypto at first since many people would want to stay away from risk assets amid a recession.
- However, the executive underlined that the crypto industry would see a strong comeback and upward trend in the long term after the U.S. hits the debt ceiling.
- Besides, Smith added that the crypto market has always followed cyclical patterns so far.
- The CEO expects 2024 will be another precedential year expecting a recovery, just as the painful 2022 came before the industry recovery this year.
- On the other hand, the U.S. currently faces the risk of hitting the debt ceiling.
- The debt ceiling refers to the maximum amount of money the U.S. government is authorized to borrow as federal debt to meet its legal obligations, including the payments for military salaries, tax refunds, and Social Security and Medicare benefits.
- If the government cannot agree upon a new debt ceiling deal or does not raise the limit, the U.S. can run out of cash by June 1, defaulting on debt.
- A recent Bloomberg survey showed that Bitcoin (BTC) is likely to be one of the top three assets most preferred by retail investors if the U.S. hits the debt ceiling.