Cryptocurrencies including Bitcoin and Ethereum can witness massive selloffs next week as the US debt default deadline nears, Blockchain.com CEO said on Thursday. Stocks and crypto prices will also fall after a debt ceiling deal as the US Treasury Department expects to issue $700 billion in Treasury bills to make up lost funds this quarter.
US Debt Situation To Bring Crypto Market Correction
During the Qatar Economic Forum organized by Bloomberg, Blockchain.com CEO Peter Smith said US default or recession will also impact crypto initially. However, crypto prices will recover after a short period.
“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.”
Smith also agreed that the crypto market recovering slowly this year and 2024 will be a massive year for crypto Bitcoin halving will happen in April.
“I think the crypto market is going to be much bigger in the future than it is today,” @blockchain‘s @OneMorePeter #QatarEconomicForum #منتدى_قطر_الاقتصادي @jennzaba pic.twitter.com/WneSNQr6iV
— Bloomberg Live (@BloombergLive) May 25, 2023
Blockchain.com is also considering an expansion of its small Middle Eastern office in Dubai, the United Arab Emirates. Dubai regulators and virtual asset regulations are progressive in crypto adoption. Blockchain.com gained approval from Virtual Assets Regulatory Authority (VARA) in September.
If the debt ceiling deal between President Joe Biden and Republicans failed, it will be “catastrophic” for the global market. However, if the deal is reached, it will pull liquidity out of financial markets.
Moreover, the US Federal Reserve to pivot this year. Fed officials are calling for two more hikes as inflation remains higher and the jobs market is still tight.
Also Read: Bitcoin, Crypto Slides As Fitch Puts US Rating Watch Negative On Debt Ceiling Standoff
Bitcoin Price Loses Momentum
BTC price briefly fell below the $26k level today as Bitcoin investors panic due to political partisanship in debt ceiling talks. Bitcoin fell 2% in the past 24 hours, with the price currently trading at $26,400. Meanwhile, the second largest crypto ETH price trades above $1800, after falling to an intraday low of $1763.
Popular analyst Rekt Capital predicts that if Bitcoin loses the $26,200 support then the price would drop into the lower $20,000. The $26200 happens to be confluent support with the 200-week MA.
Also Read: Binance Suspends Crypto Deposits As Multichain CEO Remains Missing
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