US Debt Default: Good or bad for crypto?

[Hispo]

I am from Venezuela and I can assure you that the USD here is more recognized and stronger than ever... It has reached to a point where it has been replacing our local currencies these lastest years. Nowadays it is common for people to handle USD in cash and there have been banks which offer accounts in that currency. People have turned to Bitcoin, but mostly also stable coins pegged to the dollar.

I have not seen a single Yuan bill being used in a transaction in my life, and yet even though the USA is mostly hostile to us, we have embraced their money, so you can rule out Venezuela for now (and in the mid term) when talking about de-dollarization.

It's difficult to move away from the USD. The currency is still a "force to reckon with". Even though some countries expressed their intentions to move away from the USD, they haven't been able to achieve it yet. It's likely the USD will stay with us for a few decades from now. Nothing lasts forever, so we should expect another currency to replace the USD in the future. Once the US is no longer the leading force of the global economy, it'll be game over for good. I think that would mark the end of the US as a superpower.

As far as crypto is concerned, I think it will continue to increase in price for years on end. A US downfall would certainly boost crypto markets all the way to the moon. But I doubt BTC or any other crypto will become the world's reserve currency because of their decentralized nature. Governments simply won't allow this to happen. Who knows what the future holds for our society? Just my thoughts

I agree on your thoughts on Cryptocurrency, however it has been noticed before that Bitcoin shows some correlation with Wallstreet, specifically the tech stocks, so a fall of the market would translate in a fall of the value of Bitcoin and then a steady recovery through time, in my opinion.

Also, even if the USA lost some relevance in their battle against China, there would be still countries which would not dare to ditch the USD, for simple diplomacy and inertia. All the commonwealth, Japan, Canada, Central Europe... Granted, we thought the same about Saudi Arabia, but it is harder to happen in my eyes, seeing those countries changing their views and their status quo on the reserve currency.

[1714614958]

1714614958

[1714614958]

1714614958

[1714614958]

1714614958

[1714614958]

1714614958

[terencio]

 A US debt default would have huge implications for the global economy and financial markets, including the crypto market. According to some analysts1, a US debt default could make Bitcoin soar by 70% as it becomes a safe-haven asset. However, others argue that a US debt default could also trigger a sell-off of risky assets, including cryptocurrencies.

[kojektea]

if the US itself has banned crypto, the growth of crypto should be even better when there are problems about the economy in that country, because the US could just embrace crypto again to save their country's economy. what they will affect is fiat and stocks in my opinion, it will not be related to crypto unless you have a business here from the start, unfortunately the US actually prohibits it.

[slapper]

I am from Venezuela and I can assure you that the USD here is more recognized and stronger than ever... It has reached to a point where it has been replacing our local currencies these lastest years. Nowadays it is common for people to handle USD in cash and there have been banks which offer accounts in that currency. People have turned to Bitcoin, but mostly also stable coins pegged to the dollar.

I have not seen a single Yuan bill being used in a transaction in my life, and yet even though the USA is mostly hostile to us, we have embraced their money, so you can rule out Venezuela for now (and in the mid term) when talking about de-dollarization.

It's difficult to move away from the USD. The currency is still a "force to reckon with". Even though some countries expressed their intentions to move away from the USD, they haven't been able to achieve it yet. It's likely the USD will stay with us for a few decades from now. Nothing lasts forever, so we should expect another currency to replace the USD in the future. Once the US is no longer the leading force of the global economy, it'll be game over for good. I think that would mark the end of the US as a superpower.

As far as crypto is concerned, I think it will continue to increase in price for years on end. A US downfall would certainly boost crypto markets all the way to the moon. But I doubt BTC or any other crypto will become the world's reserve currency because of their decentralized nature. Governments simply won't allow this to happen. Who knows what the future holds for our society? Just my thoughts

This discussion presents an interesting contrast between traditional fiat currencies and the emerging world of cryptocurrencies. Undeniably, USD's dominance is reflective of the USA's economic power. As @hispo illustrated, despite political tensions, USD remains a key player in global transactions. It has this aura of stability that other currencies often lack.

However, here's where my skepticism creeps in. Saying that a downfall of the US would boost crypto markets to the moon seems oversimplified. While it's true that instability often leads to increased investment in alternative assets, the transition from fiat to crypto won't be a walk in the park. Moreover, a global economic shift as big as the US losing its leading position would cause ripples across all financial markets, not just cryptocurrencies.

As for Bitcoin or any other crypto becoming the world's reserve currency, I concur with your reservations. The decentralized nature of cryptocurrencies, while attractive to some, is a hurdle too high for governments worldwide to jump over - at least in the foreseeable future. It's a wild west out there in crypto land, and I don't see governments handing over the reins anytime soon.

[Andrija Branislav]

If we look at the Prospect of a US debt default it has the potential to trigger a major shift in investor sentiment which will trigger a widespread loss of confidence among investors leading to an increase in risk aversion including cryptocurrencies where the Crypto Market also has a Dependence on the Traditional Financial System.

Everyone knows that the USD plays an important role in global trade and financial transactions although at the moment some investors may consider it. cryptocurrencies as a potential haven, thus potentially increasing the demand for digital assets. US Debt Default will be a systemic shock that could reverberate across crypto markets because of the USD, as the world's reserve currency as it is known.

[Abiky]

This discussion presents an interesting contrast between traditional fiat currencies and the emerging world of cryptocurrencies. Undeniably, USD's dominance is reflective of the USA's economic power. As @hispo illustrated, despite political tensions, USD remains a key player in global transactions. It has this aura of stability that other currencies often lack.

However, here's where my skepticism creeps in. Saying that a downfall of the US would boost crypto markets to the moon seems oversimplified. While it's true that instability often leads to increased investment in alternative assets, the transition from fiat to crypto won't be a walk in the park. Moreover, a global economic shift as big as the US losing its leading position would cause ripples across all financial markets, not just cryptocurrencies.

As for Bitcoin or any other crypto becoming the world's reserve currency, I concur with your reservations. The decentralized nature of cryptocurrencies, while attractive to some, is a hurdle too high for governments worldwide to jump over - at least in the foreseeable future. It's a wild west out there in crypto land, and I don't see governments handing over the reins anytime soon.

We may be seeing signs of American decline, but it's not over yet. This is a slow and steady process that will take years (probably decades) to accomplish. A fall in the USD's status as the reserve currency may shook crypto markets for a short period of time. But long-term speaking, market prices should go all the way to the moon. That's because the USD will become less-valuable over time. Since crypto (especially Bitcoin) is deflationary, anything affecting the USD's value (mainly inflation) would benefit market prices as a whole.

Maybe this will force countries to add crypto into their porfolios as a sort of hedge against inflation? It would make crypto (especially Bitcoin) an ideal store of value just like Gold. The US debt limit was just suspended until 2025, so time will tell us what will happen with the mainsteam economy after then. I have a feeling crypto will prevail, as Fiat currencies see their demise in the long run. Just my opinion

[redwine49]

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.

shorterm i think this is not good for crypto market. agree, if the US defaults i think bitcoin and altcoin price will fall deeply. But i don't know how about the currency itself.
are we going to the stone age? trading some gold and oil

Gold and Bitcoin will rise in price very strongly.

i hope so, but i don't believe it will come true

[greek_hephaestus]

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.


I agree on your thoughts on Cryptocurrency, however it has been noticed before that Bitcoin shows some correlation with Wallstreet, specifically the tech stocks, so a fall of the market would translate in a fall of the value of Bitcoin and then a steady recovery through time, in my opinion.

Also, even if the USA lost some relevance in their battle against China, there would be still countries which would not dare to ditch the USD, for simple diplomacy and inertia. All the commonwealth, Japan, Canada, Central Europe... Granted, we thought the same about Saudi Arabia, but it is harder to happen in my eyes, seeing those countries changing their views and their status quo on the reserve currency.
Re

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.

shorterm i think this is not good for crypto market. agree, if the US defaults i think bitcoin and altcoin price will fall deeply. But i don't know how about the currency itself.
are we going to the stone age? trading some gold and oil

Gold and Bitcoin will rise in price very strongly.

i hope so, but i don't believe it will come true

i will accept the thought in crypto, however it has been noticed before that Bitcoin shows some correlation with Wall street, specifically the tech stocks, so a fall of the market would translate in a fall of the value of Bitcoin and then a steady recovery through time, in my opinion. Also, even if the USA lost some relevance in their battle against China, there would be still countries which would not dare to ditch the USD, for simple diplomacy and inertia.

[BitcoinBabbler]

We are based see on American signs and also This is a slow and steady process that will take years probably decades to accomplish. A fall in the USD's status as the reserve currency may shook crypto markets for a short period of time.market prices should go all the way to the moon. That's because the USD will become less-valuable over time and specifically the tech stocks, so a fall of the market would translate in a fall of the value of Bitcoin and then a steady recovery through the time in my opinion.

[STT]

Debt default is bad for everyone, a bad event happening to a neighbour is still a bad thing overall for everyone in that neighbourhood.  There isnt too many circumstances that people can suffer to that extent that somehow leaves your outlook sunny and better off, it will effect everyone.   Thats how I view an economy, a reflection of society not separate or isolated.   The main thing to note is the ongoing debt situation is already a negative, its already distorting free markets with this overshadowing effect from central government and endless new money printing to serve that debt above all others.
  Crypto is really in that comparison about mitigating a negative, clawing back the losses from the abyss by avoiding leaning on something you know is rotten and soft ready to fall over.   Who wants to put all their weight onto something already known as a negative, people naturally want to distance themselves from that potential loss and the already ongoing loss hence crypto has its uses in many ways but I dont think it can possibly perfectly counter act and save the day largely because many arent involved.  

[Uruhara]

If we look at the Prospect of a US debt default it has the potential to trigger a major shift in investor sentiment which will trigger a widespread loss of confidence among investors leading to an increase in risk aversion including cryptocurrencies where the Crypto Market also has a Dependence on the Traditional Financial System.

Everyone knows that the USD plays an important role in global trade and financial transactions although at the moment some investors may consider it. cryptocurrencies as a potential haven, thus potentially increasing the demand for digital assets. US Debt Default will be a systemic shock that could reverberate across crypto markets because of the USD, as the world's reserve currency as it is known.

Well it seems that what you say I can understand. and I agree that the dollar, which is also the global reserve currency and is also the money that is used more in global transactions, will definitely also affect the global economy if the dollar currency declines as a result of America failing to pay its debts. But in the end America can now avoid defaulting on debt. and the dollar had experienced a rise back in the market.

[BitcoinTurk]

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 the short term it seems highly likely that this situation will have a positive effect on the cryptocurrency markets. The reason for this was that although decentralized structures may actually seem reliable they can fail in some difficult conditions in this way. In addition, although the inability of a state with a reserve currency to pay this debt will predominantly undermine the confidence in the country's economy it will certainly have an impact on fiat currencies. Still I don't think cryptocurrencies will appreciate too much or quickly gain a stronger place in the market in such a case. Even though I haven't been following the news very closely for the last few days, I saw that this situation didn't have much of an impact on the markets.

[redwine49]

If we look at the Prospect of a US debt default it has the potential to trigger a major shift in investor sentiment which will trigger a widespread loss of confidence among investors leading to an increase in risk aversion including cryptocurrencies where the Crypto Market also has a Dependence on the Traditional Financial System.

Everyone knows that the USD plays an important role in global trade and financial transactions although at the moment some investors may consider it. cryptocurrencies as a potential haven, thus potentially increasing the demand for digital assets. US Debt Default will be a systemic shock that could reverberate across crypto markets because of the USD, as the world's reserve currency as it is known.

Well it seems that what you say I can understand. and I agree that the dollar, which is also the global reserve currency and is also the money that is used more in global transactions, will definitely also affect the global economy if the dollar currency declines as a result of America failing to pay its debts. But in the end America can now avoid defaulting on debt. and the dollar had experienced a rise back in the market.

for now yes, but this resulted in high inflation in the US dollar which has been exacerbated by the presence of covid in recent years many businesses have failed to pay off debts which ended in bankruptcy

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 the short term it seems highly likely that this situation will have a positive effect on the cryptocurrency markets. The reason for this was that although decentralized structures may actually seem reliable they can fail in some difficult conditions in this way. In addition, although the inability of a state with a reserve currency to pay this debt will predominantly undermine the confidence in the country's economy it will certainly have an impact on fiat currencies. Still I don't think cryptocurrencies will appreciate too much or quickly gain a stronger place in the market in such a case. Even though I haven't been following the news very closely for the last few days, I saw that this situation didn't have much of an impact on the markets.

I think it's the other way around, why?
we also need a stablecoin (USDT) which they promise 1 USD should equal 1 USDT.
take a look at coinmarketcap. USD tether which is currently the anchor between fiat and stablecoins. USDT stablecoin has 83M $ marketcap and keep going up

[bettercrypto]

A US debt default would have huge implications for the global economy and financial markets, including the crypto market. According to some analysts1, a US debt default could make Bitcoin soar by 70% as it becomes a safe-haven asset. However, others argue that a US debt default could also trigger a sell-off of risky assets, including cryptocurrencies.

It's just that this is not what happened right now with what the US did because the value of Bitcoin was not affected much by this incident. The other cryptocurrencies only dropped a little which for sure will also recover immediately in the long run.

I think this ordeal that the short term holders are going through in the crypto space will be over from what I can see and feel, although I still can't tell the market's movement because of its unpredictable nature until now.

[redwine49]

A US debt default would have huge implications for the global economy and financial markets, including the crypto market. According to some analysts1, a US debt default could make Bitcoin soar by 70% as it becomes a safe-haven asset. However, others argue that a US debt default could also trigger a sell-off of risky assets, including cryptocurrencies.

It's just that this is not what happened right now with what the US did because the value of Bitcoin was not affected much by this incident. The other cryptocurrencies only dropped a little which for sure will also recover immediately in the long run.

I think this ordeal that the short term holders are going through in the crypto space will be over from what I can see and feel, although I still can't tell the market's movement because of its unpredictable nature until now.

it's not unpredictable. if an economic crisis occurs, people will prefer primary needs over cryptocurrencies or stocks even they would sell gold if they have. it is a basic human need.
however if the FED wants to save the economy. they have to print money to keep the economy running by giving way to higher inflation

[redwine49]

The possibility of a devaluation of the US dollar due to high debt levels and an increased money supply is a concern. Factors such as government debt, monetary policy, and the money supply can affect the value of a currency. Although the US dollar can depreciate against other currencies, the magnitude and timing of such changes are difficult to predict with precision. Currency valuations are affected by a multitude of factors, including economic indicators, geopolitical events, investor sentiment, and central bank policies.

Some currencies, like the Russian ruble or the British pound, have experienced devaluations in the past, but that doesn't necessarily mean the US dollar will follow the same path. So when it comes to cryptocurrencies, such as Bitcoin, they operate independently of traditional fiat currencies and central banks. While they can be influenced by macroeconomic trends and market sentiment, their value is driven by many factors, including supply and demand dynamics, technological progress, developments in regulation, and investor acceptance.

devaluation of the US dollar is not a good thing considering the consequences it would have, and they knew this beforehand.
like a price increase, causing entrepreneurs to raise prices for goods and services higher and when sales fall, it will increase the number of unemployed because manufacture want to cut their losses

[Uruhara]

If we look at the Prospect of a US debt default it has the potential to trigger a major shift in investor sentiment which will trigger a widespread loss of confidence among investors leading to an increase in risk aversion including cryptocurrencies where the Crypto Market also has a Dependence on the Traditional Financial System.

Everyone knows that the USD plays an important role in global trade and financial transactions although at the moment some investors may consider it. cryptocurrencies as a potential haven, thus potentially increasing the demand for digital assets. US Debt Default will be a systemic shock that could reverberate across crypto markets because of the USD, as the world's reserve currency as it is known.

Well it seems that what you say I can understand. and I agree that the dollar, which is also the global reserve currency and is also the money that is used more in global transactions, will definitely also affect the global economy if the dollar currency declines as a result of America failing to pay its debts. But in the end America can now avoid defaulting on debt. and the dollar had experienced a rise back in the market.

for now yes, but this resulted in high inflation in the US dollar which has been exacerbated by the presence of covid in recent years many businesses have failed to pay off debts which ended in bankruptcy

Well, regarding inflation, this cannot be avoided as a result of excessive printing during the pandemic. But the situation is gradually improving for now in several countries. except for countries that have experienced inflation even before the pandemic. America's main problem today is precisely the Recession. Well they managed to lower the inflation rate by raising interest rates. but in reality they couldn't avoid a recession and even the unemployment rate is said to have increased there. The bottom line is that the economy there is not very good but is still on a safe track.

[19Nov16]

When a problem occurs, of course it is a bad thing, as we know under the USA is a country with the biggest crypto users, many top exchanges are based in the USA such as coinbase, crypto.com and so on, when it occurs with USA, the user will panic and withdraw assets to Fiat .

[redwine49]

If we look at the Prospect of a US debt default it has the potential to trigger a major shift in investor sentiment which will trigger a widespread loss of confidence among investors leading to an increase in risk aversion including cryptocurrencies where the Crypto Market also has a Dependence on the Traditional Financial System.

Everyone knows that the USD plays an important role in global trade and financial transactions although at the moment some investors may consider it. cryptocurrencies as a potential haven, thus potentially increasing the demand for digital assets. US Debt Default will be a systemic shock that could reverberate across crypto markets because of the USD, as the world's reserve currency as it is known.

Well it seems that what you say I can understand. and I agree that the dollar, which is also the global reserve currency and is also the money that is used more in global transactions, will definitely also affect the global economy if the dollar currency declines as a result of America failing to pay its debts. But in the end America can now avoid defaulting on debt. and the dollar had experienced a rise back in the market.

for now yes, but this resulted in high inflation in the US dollar which has been exacerbated by the presence of covid in recent years many businesses have failed to pay off debts which ended in bankruptcy

Well, regarding inflation, this cannot be avoided as a result of excessive printing during the pandemic. But the situation is gradually improving for now in several countries. except for countries that have experienced inflation even before the pandemic. America's main problem today is precisely the Recession. Well they managed to lower the inflation rate by raising interest rates. but in reality they couldn't avoid a recession and even the unemployment rate is said to have increased there. The bottom line is that the economy there is not very good but is still on a safe track.

Central bank must print more money to buy financial asset and goverment bond in order to safe the economy.
after the pandemic many bussiness are going to bankrupt but with almost zero interest rate so they can get a cheaper loan

[Abiky]

The possibility of a devaluation of the US dollar due to high debt levels and an increased money supply is a concern. Factors such as government debt, monetary policy, and the money supply can affect the value of a currency. Although the US dollar can depreciate against other currencies, the magnitude and timing of such changes are difficult to predict with precision. Currency valuations are affected by a multitude of factors, including economic indicators, geopolitical events, investor sentiment, and central bank policies.

Some currencies, like the Russian ruble or the British pound, have experienced devaluations in the past, but that doesn't necessarily mean the US dollar will follow the same path. So when it comes to cryptocurrencies, such as Bitcoin, they operate independently of traditional fiat currencies and central banks. While they can be influenced by macroeconomic trends and market sentiment, their value is driven by many factors, including supply and demand dynamics, technological progress, developments in regulation, and investor acceptance.

We could say that one way or another the national debt will "blow in the US' face". It will happen sooner than you've thought. After the debt becomes "unpayable", crypto market prices will dip real hard. It will be the perfect opportunity to grab coins at a huge discount. Once the tide is over, prices should be able to rise all the way to the moon. Probably higher than they were before the US debt default.

These are uncertain times we're living into, so I'd suggest you plan ahead for the worst. Who knows how long the US has before it ceases to exist as a Federation? Just my opinion