TTL:DR
- The U.S. could go bankrupt by June if Congress doesn’t raise the debt limit.
- A default would put the country in the red and the situation could only be resolved by taking out new loans.
- In the event of bankruptcy, crypto could become an alternative choice for Americans to protect their savings.
The United States could Go Bankrupt on June 1….
As the United States faces the collapse of its banking system, a recent report by The Wall Street Journal suggests that the country’s financial situation could deteriorate rapidly during the month of May. The Treasury Secretary, Janet Yellen, has warned that the US could default on the payment of its public debt by June 1 if Congress doesn’t raise the debt limit. Without Congress raising the debt limit, the US will default on its payments for the first time.
This is a situation to which contemporary countries are accustomed, but which could turn out to be deadly, especially at a time when the dollar is more threatened than ever. Indeed, the list of foreign countries that are turning to other alternatives for trade settlement is gradually expanding.
The US government has not yet offered a solution to the problem, which will be debated next week. However, according to The Wall Street Journal, no agreement will be found at any point soon. This could put the country’s coffers definitively in the red, which could only be resolved by taking out new loans.
If the US does go bankrupt, crypto would be “rubbing its hands”. As Bitcoin (BTC) has become a safe haven, consolidated by its correlation with gold, many Americans could invest in crypto to protect their savings. Thus, cryptocurrencies could become an alternative choice. This is at a time when El Salvador or Bulgaria can become the richest countries due to their Bitcoin holdings. However, commodities such as gold still remain a serious competition.
The country is on the brink…
For now, the Federal Reserve will share its outlook imminently, and the outcome could have an impact on the Bitcoin price. Industry experts expect a 25 basis points interest rate hike.
The moral of the story is that the economy is collapsing, but Bitcoin is still going strong. The collapse of the US economy would undoubtedly have a huge impact on the global economy, but it is unclear exactly how crypto would react in such a scenario. While it may seem like a logical choice for investors seeking to protect their assets, there are still significant risks associated with cryptocurrency investment, such as market volatility and lack of regulation.
Moreover, the report by The Wall Street Journal suggests that a default on the payment of public debt is a very real possibility. While this could lead to an influx of investment into cryptocurrency, it could also cause widespread panic and economic instability.
It is important to note that while cryptocurrency investment may seem like a viable alternative in the face of economic collapse, it is still a highly speculative investment with significant risks. Investors should proceed with caution and conduct thorough research before making any investment decisions.
The potential bankruptcy of the United States is a significant event that could have far-reaching consequences for the global economy. While cryptocurrency may offer an alternative for investors seeking to protect their assets, it is important to remember that it is still a highly speculative investment. As the situation unfolds, it will be interesting to see how crypto reacts and whether it becomes a safe haven for investors seeking refuge from economic instability.
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