Standoff Over $28T of US Government Debt Could Rattle Bitcoin Market
Christopher Russo is a Mercatus Center research fellow at George Mason University. He believes that a U.S. default could trigger more than the occasional’risk of‘ trades that occur in markets. He used the term “catastrophe.”
Sometimes, Bitcoin has responded well to weakness in America’s economy. This was evident last year, when its price quadrupled and as much as 80% of American business and consumer activity were shut down. In this respect, bitcoin might have another seismic market moment that could give it a chance to be a hedge against U.S. government financial instability.
Republicans are playing hardball again this time. There’s speculation that the Democrats might need to raise the debt limit via a budget reconciliation process. Vanden Houten stated that this would allow them to pass legislation with a simple majority. (Monday night, Senate Republicans blocked the bill that would have suspended debt limits and kept the government open.
The issue is how to determine when the federal government will run out of money if it doesn’t raise the debt ceiling. According to Vanden Houten, the U.S. will run out of cash around Oct. 25, according to his forecasts. Janet Yellen , Treasury Secretary, believes this date could be as early as Oct. 18.