Blockchain.com CEO says US default would hit crypto initially

A U.S. government default would trigger an initial pull-back from crypto currencies followed by a “push upward” the CEO of London-based crypto firm Blockchain.com said on Thursday.

The U.S. government could fall behind on its bills next month – and even default on its debt – if Congress does not raise a $31.4 trillion cap on government borrowing, a failure that could trigger economic calamity and panic on global financial markets.

In the short term, “a U.S. default or a U.S. recession are probably bad for crypto. These are risk assets, and you want to take risk off,” Blockchain.com CEO Peter Smith said at the Qatar Economic Forum, organised by Bloomberg.

“On a long horizon, these are probably good for crypto…If the U.S. government defaults, we’ll probably see a quick pull-back and then a very strong push upward in the crypto market.”

The crypto currency market has followed cyclical patterns and while 2022 was “quite painful”, it is recovering this year and 2024 will be “another exponential year”, Smith said.

This report’s information was first seen on REUTERS; to read more, click this link.