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Source: https://www.ccn.com/20-trillion-us-debt-will-inevitably-lead-to-big-crypto-boom-prominent-investors/


$20 Trillion US Debt Will Inevitably Lead to Big Crypto Boom: Prominent Investors.

ShapeShift CEO Erik Voorhees has said that the growing debt of the US, which hovers at around $21.7 trillion as of November, will inevitably cause a big spike in crypto.

“When the next global financial crisis occurs, and the world realizes organizations with $20 trillion in debt can’t possibly ever pay it back and thus must print it instead, and thus fiat is doomed. Watch what happens to crypto.” Voorhees suggested that to repay the national debt, the government and the federal reserve will be forced to print more fiat money, leading to inflation and a decline in the purchasing power of the US dollar.

BlackRock, the world’s largest asset manager with more than $6.317 trillion in assets under management, is the latest major financial institution to express concerns regarding the rapidly increasing national debt of the US. The conglomerate’s CEO, Larry Fink, stated that the US government is heading towards a supply problem due to the country’s increasing budget deficit. Beginning next year, Fink noted that the US could be forced to borrow $1 trillion a year. The rising inflation rate of the US dollar, as shown by the growing interest rates of the Federal Reserve, has become too high to sustain the economy. “That could be the real issue related to everything: where we have interest rates becoming too high to sustain the economy with its growth rates,” BlackRock CEO Larry Fink said.

Nouriel Roubini, a professor at NYU Stern School and a cryptocurrency skeptic, echoed the sentiment of Fink, emphasizing that the interest rate has increased to a point in which the US economy cannot match it with its growth rate. “Second, because the stimulus was poorly timed, the US economy is now overheating, and inflation is rising above target. The US Federal Reserve will thus continue to raise the federal funds rate from its current 2% to at least 3.5% by 2020, and that will likely push up short- and long-term interest rates as well as the US dollar,” Roubini said, predicting a major financial crisis by 2020.

If a financial crisis is to occur by the end of 2020 as predicted by many economists in the US primarily due to the overly high-interest rate set forth by the Federal Reserve, then the US dollar could drop substantially in value and open up investors to stores of value such as gold and cryptocurrencies whose value is not dependent of the global economy.

Vinny Lingham, the founder of Civic and a partner at Multicoin Capital, said that more wealth would be created in crypto in the next 10 years than the past ten years, despite several large corrections the market faced and will continue to experience in the years to come.

“More wealth will be created in crypto over the next 10 years, than over the prior 10 years. But remember, like any success story, it’s not going to be a straight line up. Keep believing and just be patient.”

It's interesting to see Fink compared to Voorhees here. I'm guessing Fink doesn't agree that the looming national debt will cause a cryptocurrency boom. It wasn't long ago that he said BlackRock's clients have zero interest in it (https://www.bloomberg.com/news/articles/2018-07-16/blackrock-s-fink-says-clients-have-zero-interest-in-crypto).

I think it's pretty unpredictable what would happen in a real financial crisis. I don't share Voorhees's optimism.

The predictive forecast from a very influential person. This again confirms that cryptocurrency will grow very well in the future

I honestly don't think such a scenario would be that big of a boon for crypto. We've already seen it in the small scale (Venezuela, Turkey, etc.) and crypto hasn't been a very popular choice for diversification. A USD devaluation would affect everyone's economies, and it's very likely that there will be no escaping it.

I could easily be wrong, but I'd rather not find out. The growing debt truly is concerning though. It's going to be interesting to see how they try to work around it.

People in crypto said something positive about crypto and there's a story about it?

Oh gee, I haven't read tons of opinions by people that may or may not know what they are talking about in the space. Count me in and bring the whole forum who hasn't read enough about how big "crypto" could be....

If only there were more news sites telling everyone how valuable the latest crypto currency and ICO launching could possibly be. Maybe people would throw money at it and believe millions are around the corner if they get into crypto.

Or maybe it keeps scaring away people from a bunch of snake oil salesmen that want to pollute an emerging industry and make a quick buck.

All while bitcoin sits there storing value and being more secure than any of the latest and greatest coins being shilled.

Not necessarily. Some may buy, indeed, but many will lose money and assets and will sell Bitcoin in order to recover.
Pump and dump -like spikes may be more possible that a big boom. At least for these reasons.


I think that Bitcoin believers don't hope for booms. A small constant healthy growth or even (price) stagnation are also pretty good options.

unfortunately i can not see any kind of "crypto" boom in our near future because the "cryptos" are mostly pump and dumps and you can not expect any kind of real booms from any of them.
the pumps can only take the price so high before it busts and the coin gets dumped hard. as you can see from the market of this year as the altcoins continue getting dumped to this day.

bitcoin is another matter. the US economy might collapse and we start seeing some economy crisis and in that case bitcoin may start shining and increases its price.

While I want to believe what Voorhes stated on this article, real-world scenarios in the midst of a financial crisis always tend to deviate from models and predictions made by experts so still, I don't want to bank on it hard. There are still other places where assets could go, particularly but not exclusively gold and other precious metals, with cryptocurrencies trailing due to lack of trust from institutional investors. We watched the US employ all these crazy economic instruments and policies in the past few years that lead to its growth being stunted by inflation, and if this keeps up, financial crisis worse than 2008 could occur. We don't want that to happen, but then again, the US is forcing itself to the brink of such a catastrophe, and to escape the downfall, keeping our assets in another relatively safe asset is a must, and this could be cryptocurrencies or precious metals.

I share the same opinion as you! When the financial crisis will become prominent, a country like US will start taking some steep measures to bring back the wealth to their treasury! Among many other techniques, increasing interest rate is certainly one of them. It is an effective technique often exercised by the central banks to fight inflation and bring back the wealth to fill the coffer of the country. As a result, the US citizens will end up paying more in their loan repayments commitments. The price of daily commodities will be increased to bridge the gap of revenue for the companies because the business loan interest will also go up. This way the country will start filling up their coffers from the public's pocket and the common people will be left with a limited resources in hand.

I am not optimistic that US financial crisis will lead to a crypto boom due to these reasons! When the common people will be left with limited resources, they will not have the power to invest in cryptos the way we are envisaging now. The demand may not increase to that level where we can experience big crypto boom. Even though I personally want it to happen because it will make me richer, but that may not be the case!

I really hope that everything will happen because we are all tired of watching the flat on the cryptocurrency market and already want to see very good growth

People are still skeptical about crypto's though there's a possibly that some would probably look at crypto as a solution to that debt problem but we can't be sure if most of them will come here.

World's entire economy is dependent to US, so if financial crisis will trigger soon I guess that each market will be affected. Like stocks market, we saw it on bear market while crypto is on the same track too. But I'd like to see the crypto market boom soon.

There is a global crysis on the way and it is getting closer every day.

It will cause crypto markets grow like hell.

And you forget to grab some popcorn!

This is a great new, and more with that CNN source!, that huge murica debt will bring some nice time to cryptos, so, is time to ride the wave guys. Lets hope for another $20k bump for this xmas.

US stretching too much of its  debt. while the economy cannot pay off the debt... USD will inflate even further. investor will escape from USD. bitcoin is one of the safe haven, potentially the whole crypto market.

They are never going to be able to repay this debt, if donald trump the wirld greatest businessman billionaire, then no one else can. Only bitcoin can help them

US debt can lead to may be some budget expenses cutting, but it can not affect crypto, because debt is in USD. The problem can be that the debt is very, very large.  ;)

I definitely think that this is an interesting way to look at, and maybe find a solution for, the instability of our market. I think that the decentralization of cryto currencies is definitely a reason why it is soaring in popularity and why many people think that it is soon going to become the new standard. I think that the government, specifically The Federal Reserve, could maybe take a few prominent characteristics from cryto currencies in order to shape a better functioning economy.

I think Bitcoin was still too young and experimental for fiat instability to drive adoption in those cases. When you're worried about putting food on the table tomorrow and next week, it's a lot smarter to put your money into dollars than something so risky and volatile as Bitcoin.

That's what Voorhees is overlooking -- there's no guarantee if/when the US Dollar collapses that Bitcoin will be an established, trusted asset yet. Whether Bitcoin could serve as the "escape route" really depends on how far along we are with adoption and legitimacy.

Its true. I agree. Basically issue is about centralization and decentralization, current economy is completely controlled under centralized system controlled by governing authorities. And its a traditional way of exchanging services or good against currency. Crypto is really great alternative solution. But it all still under tasting phase, every developed countries are trying and testing possibilities of implementation of blockchain and cryptocurrencies.

You claim that during global crisis, a lot of cash flows will be directed from traditional actives to crypto industry , dont you?
What a reason?

I completely agree with Voorhees that debt stimulates printing more money and inflation will burst eventually. Once the USD is crushed, I think it will be a catastrophy for the fiat system as such, because dollar is supposed to signify stability, be something that other fiat currencies also rely on. EUR might survive longer, but it will be just a matter of time. Returning to backing money with gold won't make much sense, because there isn't enough gold anyway. Cryptocurrencies might be what saves the world, with their naturally limited supply offering a financial system with no risk of hyperinflation.

I expect that to happen. If Donald Trump cannot find a way to minimize their deficit to battle the inflation, USA economy will collapse and the people will suffer. It is better to save some for the storm coming.

It will collapse but we don't know how long it will take. It may be in the next 10 years, but it can also be 20 or 50 years. Counting on profits from a possible US economy collapse is pretty naive. Holding some cryptocurrencies just to play it safe is smart. Don't be greedy, treat it like a failsafe.

Yeah who knows how long it will take for this to actually play out. We could see a stagflation scenario like what happened with Japan in the 1990's, which wouldn't see a huge jump to crypto, hard to say!

I think that at the moment it is difficult to say how Bitcoin will behave during the economic crisis. It will be a difficult time and I think that Bitcoin has a chance to survive in these years.

This will affect the direction and movement of Cryptocurrency. But using Crypto to get rid of this debt will make things worse, so I'm sure this will not happen. It is a great solution, but the creditors will not be foolish to accept this solution.

I hope so. But, what is the link between the financial crisis and cryptocurrencies.
I am not a financial expert that is why I am wondering about how this crisis may affect the cryptocurrency market!

21.7 trillion $ Oh my GOD! The U.S debt is the biggest in the world? to Whom we owe this money?  This is scary and exciting at the same time I mean I do not want another economic crisis but we will love to see the price of Bitcoin rise up but not because of an economic crisis. Lets hope that the federal reserve, banks and the government know what are they doing and not mess up everything

Of course altcoins are nonsense and will not play a major role may the US collapse (which it definitely should on our lifetimes assuming you are around age 60... since it should happen within the next 20).

Some theorize that Bitcoin was created by US intelligence or some other big party (your pick here... Israel, Rothchilds, anyone big you like) in order to avoid the fiat collapse and have a neutral safe haven that allows for seamless movements in the information age (so gold doesn't cut it). I find it ironic that there's $21 trillion in debt and 21 million Bitcoin total... it's like a perfect storm for $1,000,000 BTC.

That's true. I certainly don't think it's going to happen within today to 2020, which is apparently when they think it'll happen:


We'll see though I suppose. Maybe some unexpected development can fast track adoption.