US Debt Default: Good or bad for crypto?

[Lamkuthang]

There are talks among US politicians and economists about the country defaulting on its national debt. Congress usually approves raising the debt ceiling, so I don't see what's the issue here. But if somehow the US defaults, how would the crypto market react? Positively or negatively? The USD is the reserve currency of the world, so it's likely everything (stocks, crypto, etc) will crash alongside it.

What do you think? Is a US default good or bad for crypto in the short term? Your input will be greatly appreciated. Thank you.

I doubt US will be defaulting in it's debt. But for discussion if I consider that will default on their debt, it will be an excellent thing for crypto market. Billions of dollars will be infused into the crypto market from various institutional investors to park their additional funds. Similarly Gold and other precious metals will also see a huge demand.

Corporates are sitting on cash piles so they will need to find an alternative solution to park their funds for short to medium term is US government starts defaulting. But this will not be great situation for the rest of the world. The world economy may go into a deep recession which will take longer to recover.

Yes, and the bear market is coming soon. Indeed they have everything and don't want to lose anything but I am also a bit confused from the sentence you wrote why should they park their funds for the short to medium term if the US government starts to fail, when this is seen as an alternative to recovery? ? Please explain @avikz !!!

[Wend]

There are talks among US politicians and economists about the country defaulting on its national debt. Congress usually approves raising the debt ceiling, so I don't see what's the issue here. But if somehow the US defaults, how would the crypto market react? Positively or negatively? The USD is the reserve currency of the world, so it's likely everything (stocks, crypto, etc) will crash alongside it.

What do you think? Is a US default good or bad for crypto in the short term? Your input will be greatly appreciated. Thank you.

In my opinion, the default in the US will start a global recession.

We will see a drop in business activity worldwide.  Countries that export metals and hydrocarbons will suffer the most.  In these countries, the situation with the economy will be catastrophic.

The United States will also suffer, but to a lesser extent.  In Europe, everything will be quite stable, and the euro will rise against the US dollar. 

Gold and Bitcoin will rise in price very strongly.

The entire European economy mainly depends on the US, and if their big brother collapses, I don't think they will be much more stable than the US. No one will be stable in the event of a US debt default because they are the center of the world economy as well as the holder of the world's money printing machine. But you're right, assets like gold and bitcoin will go up a lot because the demand for safe havens will spike there. That will benefit bitcoin but I don't expect it to happen because it will have a huge negative impact on our lives.

[Similificator]

Of course, it would affect bitcoin in a bad way. Just like any other bad news in the past that were significant enough in the eyes of the majority, it will drag the price of bitcoin down and depending on the severity of the issue, the price of Bitcoin also follows. Just imagine what the effects would be by then when a negative news that includes the US ever arises like what you have mentioned. It will inevitably affect the price negatively. But this doesn't mean death for bitcoin though, in my opinion, bitcoin will still be able to recover even if such an event happens in the US. (This includes the entirety of this industry)

[davis196]

There are talks among US politicians and economists about the country defaulting on its national debt. Congress usually approves raising the debt ceiling, so I don't see what's the issue here. But if somehow the US defaults, how would the crypto market react? Positively or negatively? The USD is the reserve currency of the world, so it's likely everything (stocks, crypto, etc) will crash alongside it.

What do you think? Is a US default good or bad for crypto in the short term? Your input will be greatly appreciated. Thank you.

The US default would probably have a short term positive impact over crypto, because of the panic in the fiat financial markets many investors might turn towards crypto as an alternative. On the other hand, a US default might cause a new Great Depression worldwide and I'm not sure how the cryptocurrency markets would react to a big recession or depression. The prices of all financial assets might start going down.
The US dollar was the number 1 global reserve currency 20-30 years ago. Nowadays, the usage of US dollars as a reserve currency will drop more and more, which is something normal. The BRICS countries have grown a lot over the last 20 years and they will create their own reserve currency.

[yhiaali3]

This is one of the worst aspects of the matter, the correlation of the global economy, stocks, banks and even cryptocurrencies with the dollar is the worst of the matter, the collapse of the dollar will lead to the collapse of all of these. This is the main reason why Satoshi strived to invent Bitcoin to decouple the global economy from the dollar.

Defaulting on debt will certainly have a negative impact on cryptocurrencies in the short term, but in the long term I expect its impact to be positive because everyone will seek to convert their savings into bitcoins before their value collapses permanently, and this will push the price of bitcoin up.

[fuguebtc]

There are talks among US politicians and economists about the country defaulting on its national debt. Congress usually approves raising the debt ceiling, so I don't see what's the issue here. But if somehow the US defaults, how would the crypto market react? Positively or negatively? The USD is the reserve currency of the world, so it's likely everything (stocks, crypto, etc) will crash alongside it.

What do you think? Is a US default good or bad for crypto in the short term? Your input will be greatly appreciated. Thank you.

The possible impact on the crypto market will be felt considering that currently the US market plays a major role in influencing Bitcoin price movements, this is evident from the several times The FED raised interest rates which also affected Bitcoin prices. And if the US were to default, it would also be able to affect the crypto market globally and it is possible that there will be many crypto holders who are affected by this and it will make the crypto market conditions even more unstable this year. Hopefully between the US government and their parliament will find a bright spot related to this problem.

When the Fed raises interest rates, it will affect all assets but will benefit the USD, so bitcoin or gold falling during that time is natural. But if the US defaults, it will be the exact opposite, the USD will depreciate, and people will quickly look for alternatives, and bitcoin could be a perfect alternative and gold. So I think a US default would be more positive for bitcoin than a negative. But all possibilities are possible, so I do not expect that to happen and do not believe the US will default  .

[gaston castano]

There are talks among US politicians and economists about the country defaulting on its national debt. Congress usually approves raising the debt ceiling, so I don't see what's the issue here. But if somehow the US defaults, how would the crypto market react? Positively or negatively? The USD is the reserve currency of the world, so it's likely everything (stocks, crypto, etc) will crash alongside it.

What do you think? Is a US default good or bad for crypto in the short term? Your input will be greatly appreciated. Thank you.

The potential impact of a US debt default on the cryptocurrency market is uncertain and complex. It's important to note that a US debt default would have significant global economic implications, and the repercussions would likely extend beyond the crypto market alone.
In times of economic uncertainty or financial instability, some individuals and institutions may turn to alternative assets, including cryptocurrencies, as a potential hedge against traditional financial systems. This increased interest and demand could potentially lead to a short-term surge in cryptocurrency prices.

[zasad@]

The only event that will be able to make mass adoptions for cryptocurrency is the collapse of banks in the United States. And this can only happen as a result of a default or an increase in rates by the Fed. About the default, I do not believe. This is another political struggle, and the US still has the opportunity to pay its obligations for many years.

[Smartprofit]

There are talks among US politicians and economists about the country defaulting on its national debt. Congress usually approves raising the debt ceiling, so I don't see what's the issue here. But if somehow the US defaults, how would the crypto market react? Positively or negatively? The USD is the reserve currency of the world, so it's likely everything (stocks, crypto, etc) will crash alongside it.

What do you think? Is a US default good or bad for crypto in the short term? Your input will be greatly appreciated. Thank you.

In my opinion, the default in the US will start a global recession.

We will see a drop in business activity worldwide.  Countries that export metals and hydrocarbons will suffer the most.  In these countries, the situation with the economy will be catastrophic.

The United States will also suffer, but to a lesser extent.  In Europe, everything will be quite stable, and the euro will rise against the US dollar. 

Gold and Bitcoin will rise in price very strongly.

The entire European economy mainly depends on the US, and if their big brother collapses, I don't think they will be much more stable than the US. No one will be stable in the event of a US debt default because they are the center of the world economy as well as the holder of the world's money printing machine. But you're right, assets like gold and bitcoin will go up a lot because the demand for safe havens will spike there. That will benefit bitcoin but I don't expect it to happen because it will have a huge negative impact on our lives.

Yes, I also would like the price of Bitcoin to grow slowly, there would be no wars, upheavals, economic crises, hunger, unemployment and cultural degradation in the world.  Most people in the world are not interested in a recession in the economy. 

European countries are now really very closely connected with the US.... 

If the economic crisis covers all countries, then this may have negative consequences for the entire planet.  We may face a slowdown in scientific and technological progress and the beginning of a period of cultural degradation of mankind (an analogue of the historical dark ages). 

This is the most catastrophic scenario.  I hope it doesn't get implemented.

[be.open]

The only event that will be able to make mass adoptions for cryptocurrency is the collapse of banks in the United States. And this can only happen as a result of a default or an increase in rates by the Fed. About the default, I do not believe. This is another political struggle, and the US still has the opportunity to pay its obligations for many years.

I don't think many people believe this. What if this is the plan, to do something no one believes in? Simply raising the debt ceiling again is predictable, boring and not a solution to the problem, it seems that the period of increased rates promises to drag on and in such conditions it becomes too expensive to even service the debt, not to mention the possibility of starting to pay off the body of the debt itself. In just one day, May 15, the US government spent nearly $51 billion on interest on the debt. In the end it's not a matter of faith and the crowd is always wrong.

[vv181]

Supposing they default, although it is very unlikely, I think people would surely move their funds into hard assets. That seems like one of many probable scenarios. In regard to cryptocurrencies, I'm sure it will be on some people's consideration. So it will be very interesting for cryptocurrency spaces since it will meet a distinct economic condition for the market itself.

Specifically, cryptocurrencies that are truly backed by real things, like PoW, would at the very least gain attention as an alternative for people to keep their funds intact. Although the majority of people would likely go into battle-tested assets like gold, in case the scenario happens, that could be a tipping point for the whole cryptocurrency market, especially Bitcoin.

[Velemir Sava]

The only event that will be able to make mass adoptions for cryptocurrency is the collapse of banks in the United States. And this can only happen as a result of a default or an increase in rates by the Fed. About the default, I do not believe. This is another political struggle, and the US still has the opportunity to pay its obligations for many years.

I don't think many people believe this. What if this is the plan, to do something no one believes in? Simply raising the debt ceiling again is predictable, boring and not a solution to the problem, it seems that the period of increased rates promises to drag on and in such conditions it becomes too expensive to even service the debt, not to mention the possibility of starting to pay off the body of the debt itself. In just one day, May 15, the US government spent nearly $51 billion on interest on the debt. In the end it's not a matter of faith and the crowd is always wrong.

True and understandable to be skeptical about conventional approaches such as raising the debt ceiling, especially when facing a prolonged period of rising interest rates especially when compared to the current conditions pose significant challenges. As you mentioned, the staggering daily spending on interest payments highlights the gravity of the situation.

[bussybuddy]

IMO, US default will affect global financial markets, including crypto markets. However, the impact of this on cryptocurrencies can be positive or negative depending on market fluctuations and how the iceberg completes the financial and economic policy of a range of governments. A U.S. debt default could have a devastating effect on the crypto market. However, the effects can be positive or negative depending on market movements and how the iceberg completes the economic and financial policies of a range of governments.

[bittraffic]

The only event that will be able to make mass adoptions for cryptocurrency is the collapse of banks in the United States. And this can only happen as a result of a default or an increase in rates by the Fed. About the default, I do not believe. This is another political struggle, and the US still has the opportunity to pay its obligations for many years.

I don't think many people believe this. What if this is the plan, to do something no one believes in? Simply raising the debt ceiling again is predictable, boring and not a solution to the problem, it seems that the period of increased rates promises to drag on and in such conditions it becomes too expensive to even service the debt, not to mention the possibility of starting to pay off the body of the debt itself. In just one day, May 15, the US government spent nearly $51 billion on interest on the debt. In the end it's not a matter of faith and the crowd is always wrong.

True and understandable to be skeptical about conventional approaches such as raising the debt ceiling, especially when facing a prolonged period of rising interest rates especially when compared to the current conditions pose significant challenges. As you mentioned, the staggering daily spending on interest payments highlights the gravity of the situation.

If could be a planned default after all they want to destroy the fiat system to launche the CBDC. Although CBDC is somehow just a digital form of fiat system, the difference is that they could control the people from now on.

I believe they technically will not default but just completely replace with CBDC which its where they will decide to raise the debt ceiling.

[southerngentuk]

In the short term, a US default could create significant turmoil and instability in the market. This could lead to a general downturn in financial markets. In times of economic inflation, it is common for investors to adopt a risk-averse approach and may choose to sell their high-risk assets in order to move into more stable options.

On the other hand, default could also act as a catalyst to highlight the importance of bitcoin's decentralization and value. The fact that Bitcoin operates on a decentralized network and is not governed by central authorities could make it an attractive alternative for those looking for a hedge against risks related to the traditional financial system. The growing recognition of Bitcoin's unique properties could lead to renewed interest in the cryptocurrency in the long term.

[Iadegbola34]

US politicians and economists are worried about the possibility of the United States defaulting on its national debt. In the event of a default, both traditional financial markets and cryptocurrency markets are expected to experience negative consequences. As the world's reserve currency, the US dollar's instability could lead to market turbulence, affecting stocks and cryptocurrencies alike. However, the Bitcoin market reaction is influenced by various factors, including investor sentiment. In summary, a US default would likely have a detrimental short-term effect on the Bitcoin market due to the erosion of trust in the USD.

[tabas]

There are talks among US politicians and economists about the country defaulting on its national debt. Congress usually approves raising the debt ceiling, so I don't see what's the issue here. But if somehow the US defaults, how would the crypto market react? Positively or negatively? The USD is the reserve currency of the world, so it's likely everything (stocks, crypto, etc) will crash alongside it.

What do you think? Is a US default good or bad for crypto in the short term? Your input will be greatly appreciated. Thank you.

Not an expert on this matter but based on the opinions of the good finance experts that I happen to watch, they're suggesting people to keep off their hands to any asset that's pegged to USD. And they're suggesting people to buy real estate, gold, silver and even Bitcoin. All of them are telling the same thing and that's the US dollars collapsing. But we will never know until we finally get into that part that they've already defaulted. What we're going to see next? Another printing saga? Possible and if that happens, that's gonna be good for crypto but not on them and again, a domino effect to the world's economy which will increase inflation again. However, we've been used to these inflation hikes.

[Mate2237]

From what you in the first paragraph of the op, I didn't see any link between US politics and cryptocurrency. Though that is my own understanding. Cryptocurrency has nothing to do with US national debt Profile but if they the US Government  like to buy cryptocurrency and store it to clear their debt then that will be a good idea of the government and it is a positive one but as for now nothing like that is there so they should take their politics to their dollar economy way. If us government default crypto then it will hail positive and not negative. Because US is the world power so if they default it then force of adoption will be very high.

[Gyfts]

The only event that will be able to make mass adoptions for cryptocurrency is the collapse of banks in the United States. And this can only happen as a result of a default or an increase in rates by the Fed. About the default, I do not believe. This is another political struggle, and the US still has the opportunity to pay its obligations for many years.

A default wouldn't collapse the banks necessarily -- banks do more than just hold USD. If their purchasing power was below their total liabilities, though, then their in a lot of trouble. Even in the event of a default, I'd expect it would create a bump in crypto for the shock value that "U.S. defaults on debt" would create, but not the rise you would see if a major currency collapsed. As long as the U.S. has a strong military and an economy that isn't in disarray, a default would not trigger an entire collapse. Think of USD as being a proxy of its military strength + economy (as well as other factors, of course). If it were not for its military and GDP, would anyone actually trust a country/currency with 30 trillion in debt?

[serveria.com]

What do you think? Is a US default good or bad for crypto in the short term? Your input will be greatly appreciated. Thank you.

I think that in the event of a default, in the short term, the price of bitcoin will fall into an area of increased turbulence due to a head-on collision of two strong trends - on the one hand, the price will drop sharply, because bitcoin belongs to the class of high-risk financial assets, on the other hand, the price will rise sharply, because that the network hashrate is stable, blocks continue to be mined at intervals of an average of every ten minutes, and a fall in the dollar automatically means an increase in bitcoin in the btc/usd pair.

I agree, perhaps a flash crash is possible, with an immediate or not so immediate pump due to fluctuating exchange rates. Just want to add that any failure of any FIAT is positive for Bitcoin in the long run.