Would a U.S. Debt Default Really Send Crypto Soaring?
Just about everyone agrees that the U.S. government defaulting on its debt obligations in June would be an economic catastrophe of the highest order. For cryptocurrencies, the impact of a debt default would be far more consequential than the current banking crisis.
And, yet, a number of prominent voices are actually suggesting that crypto might soar in the wake of a U.S. government default. Standard Chartered Bank, for example, is now suggesting that Bitcoin (CRYPTO: BTC) might soar by 70% as it becomes a safe-haven asset. But just how realistic is that prediction? Below are three possible scenarios for what might happen to crypto.
Let's start off with a worst-case scenario, so we can understand how truly catastrophic a debt default would be. There would be an immediate backlash against every U.S. asset, including the U.S. dollar. And, as Treasury Secretary Janet Yellen has warned, there would likely be mass layoffs, payment failures across the economy, and a cratering of U.S. credit markets. Most likely, investors would immediately dump holdings of any risky U.S. cryptocurrency stocks, such as crypto mining stocks.
Source Fool.com
