• US $31.4 trillion debt ceiling is close to being reached, and a bipartisan agreement needs to be made before June 1 in order to prevent a debt default.
• A US government debt default could be catastrophic, with the stock markets crashing, millions of jobs lost, and the economy going into a recession.
• The Cointelegraph Report discusses the risk of a possible US debt default and its impact on crypto and the broader market.
US Debt Ceiling Crisis
The United States has hit its $31.4 trillion debt ceiling and is running out of money. Treasury Secretary Janet Yellen has said that the debt ceiling must be raised before June 1 or else the country risks missing its debt obligations due to Treasury bondholders, thereby defaulting on its sovereign debt. Bipartisan negotiations are underway to lift the debt ceiling without any preconditions from Republicans who want contingencies for lifting it, such as cuts in government spending.
Potential Economic Impact
Most experts agree that if a U.S. government default were to occur it would have devastating consequences for both the U.S economy and global financial system: stock markets could crash, millions of jobs could be lost, and the economy could fall into recession if nothing is done by June 1st 2021 .
Cointelegraph released a report discussing this issue further – assessing the risk of a possible US debt default and its impact on crypto assets like Bitcoin as well as other markets including bonds investments in general . The report also looked at how best to play these events when BTC prices move up or down 10%.
A survey conducted by Financial Times found that Bitcoin was one of top 3 assets investors would consider buying should there be an eventual US government debt default .
The future remains uncertain but it is clear that no matter what happens in terms of an eventual US government debt default , understanding how crypto funds shape digital asset markets will be essential for those looking to make informed decisions about their investments .