- No troubles for Bitcoin
- The U.S. is on the verge of a crisis
- Однако мало кто думает, что до этого дойдет
Bitcoin bulls have had a good year so far. If America defaults on its debt, market participants may be even more willing to invest in Bitcoin. This is the opinion of Geoff Kendrick, head of FX research at Standard Chartered. Last week, he described a U.S. default as a “low-probability, high-impact event” which could cause Bitcoin’s value to grow by about $20,000, representing an increase of nearly 70% from the current level.
No troubles for Bitcoin
In early 2023, Bitcoin’s value was below $17,000 but now it is close to $30,000. There is still a long way to go to the all-time high of almost $69,000 in November 2021. Some of the customers who invested in Bitcoin at its peak might still regret their decision.
From now on, however, Bitcoin will perform well even if other cryptocurrencies, which trade more like stocks, do not — at least according to Geoff Kendrick. On April 24, he predicted that Bitcoin could surge to $100,000 by the end of 2024 and the crypto winter would be over. Kendrick also said that Bitcoin has benefited from its reputation as a “branded safe haven, a perceived relative store of value and a means of remittance.”
The U.S. is on the verge of a crisis
The reason is America’s debt. On April 26, House Republicans narrowly passed legislation that would raise the government’s legal debt ceiling in exchange for steep spending restrictions. They are trying to push President Joe Biden into negotiations on federal spending and reach a compromise that would allow the debt to be lifted.
If America did default on its debt this summer, the consequences could be catastrophic both for the country and for the world. In March, U.S. Treasury Secretary Janet Yellen warned of “an economic and financial catastrophe” if America defaulted on its debt.
Not many expect this scenario to unfold
But even if the U.S. does not default, many Bitcoin evangelists feel optimistic about the cryptocurrency’s future. ARK Invest CEO Cathie Wood believes that the world’s leading cryptocurrency will grow rapidly in the next several years. In February, she said that in five years Bitcoin will hit “roughly $670,000, something like that, and then by 2030, as we see more use cases and more of these insurance policies taken out against fiscal and policy regimes that are not healthy, we think it could pass $1 million.”
Many experts are skeptical about Bitcoin. For example, after correctly predicting last year’s drop of Bitcoin, Mark Mobius, the billionaire co-founder of Mobius Capital Partners, said in December that Bitcoin would fall to $10,000 at some point in 2023. He has even called Bitcoin “not an investment” but “a religion.”
In April, Warren Buffett, the Berkshire Hathaway boss, once again expressed his skeptical view of Bitcoin. “Bitcoin is a gambling token, and it doesn’t have any intrinsic value. But that doesn’t stop people from wanting to play the roulette wheel,” he commented.
So far, the global political and economic situation is favorable for crypto as it is where people seek refuge from instability, despite the high volatility.
