Cryptocurrencies, including Bitcoin and Ethereum, could witness massive sell-offs next week as the deadline for US debt default approaches, Blockchain.com’s CEO said Thursday. Stocks and crypto prices will also drop following a debt ceiling deal, as the US Treasury expects to issue $700 billion in Treasury bills this quarter to make up for lost funds.
US Debt Situation to Bring Crypto Market Correction
At the Qatar Economic Forum organized by Bloomberg, Peter Smith, CEO of Blockchain.com, said the US default or recession will also affect crypto initially. However, crypto prices will recover after a short while.
“In the long run, these are likely to be good for crypto… If the US government defaults, we will likely see a rapid pullback and then a very strong upside in the crypto market.”
Smith also agreed that the crypto market is slowly recovering this year and that 2024 will be a huge year for crypto. Bitcoin halving will take place in April.
“I think the crypto market will be much bigger in the future than it is today,” @blockchain‘s @OneMorePeter #QatarEconomicForum #منتدى_قطر_الاقتصادي @jenzaba pic.twitter.com/WneSNQr6iV
— Bloomberg Live (@BloombergLive) May 25, 2023
Blockchain.com is also considering an expansion of its small Middle East office in Dubai, United Arab Emirates. Dubai regulators and virtual asset regulations are leading the way in cryptocurrency adoption. Blockchain.com received approval from the Virtual Assets Regulatory Authority (VARA) in September.
If the debt ceiling deal between President Joe Biden and the Republicans falls through, it will be “catastrophic” for the global market. However, if the deal is reached, it will take liquidity out of the financial markets.
In addition, the US Federal Reserve is turning around this year. Fed officials are calling for two more hikes as inflation continues to rise and the labor market remains tight.
Also Read:Bitcoin, Crypto Slides As Fitch Makes US Assessment Negative On Holding Off Debt Ceiling
Bitcoin price is losing momentum
BTC price briefly fell below the $26,000 level today as Bitcoin investors panicked over political bias in debt ceiling talks. Bitcoin is down 2% in the past 24 hours, with the price currently trading at $26,400. Meanwhile, the second largest crypto ETH price is trading above USD 1800 after falling to an intraday low of USD 1763.
Popular analyst Rekt Capital predicts that if Bitcoin loses the USD 26,200 support, the price would fall towards the lower USD 20,000. The $26200 happens to be confluent support with the 200 week MA.
Bitcoin price. Source: Stretch Capital
Also Read: Binance suspends crypto deposits as Multichain CEO remains missing
Varinder has 10 years of experience in the Fintech sector, with more than 5 years dedicated to blockchain, crypto and Web3 developments. A technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in more than 5,000 news stories, articles and newspapers. With CoinGape Media, Varinder believes in the enormous potential of these innovative future technologies. He is currently covering all the latest updates and developments in the crypto industry.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.
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