‘All Bets Are Off’ – Looming $31.4 Trillion Crypto Price Earthquake May Be About to Hit Bitcoin and Ethereum
BitcoinBTC, ethereum and other major cryptocurrencies have exploded into 2023 – rocketing higher despite ethereum founder Vitalik Buterin issuing a bull run warning.
Subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and successfully navigating the roller coaster of bitcoin and crypto market
The bitcoin price topped $30,000 per bitcoin last month, sparking some eye-popping bitcoin price predictions, while a long-awaited upgrade has helped drive the ethereum price higher.
Now bitcoin, ethereum and crypto traders are eyeing both the Federal Reserve’s next interest rate decision and the looming $31.4 trillion debt ceiling crisis that could see the US run out of cash as soon as June 1, according to Treasury Secretary Janet Yellen.
It is at the beginning of a bull run that you need updated information the most! Sign up for free now CryptoCodex—A daily newsletter for traders, investors and the crypto-curious that will keep you ahead of the market
The bitcoin price could add $20,000, pushing it to around $50,000 per bitcoin, in the event of a US debt default, according to Geoff Kendrick, head of currency research at Standard Chartered. Insider such a “low-probability, high-impact event” could see the bitcoin price swing wildly and “it’ll probably come in a little bit lower on day one or day two or week.”
“The optimal trade would probably be long bitcoin, short ethereum,” Kendrick said. — Such a mixture would probably be a good expression of this.
US Treasury Secretary Janet Yellen wrote to congressional leaders this week, warning that the US risks running out of cash as soon as June 1 – which would rattle global markets and send shockwaves through the economy.
“After reviewing recent federal tax receipts, our best estimate is that we will not be able to continue meeting all of the government’s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before the. time,” Yellen wrote.
Meanwhile, the Federal Reserve is poised to raise interest rates by a quarter of a percentage point, the 10th increase in a row that would see the benchmark rate rise to 5% to 5.25%, the highest since 2006.
“Investors are focused on what the Fed does on Wednesday,” said Antoni Trenchev, co-founder and managing partner at crypto lender Nexo. Barron’s. “If the Fed indicates it is not done raising rates, all bets are off for crypto and other risk assets.”
Register now for CryptoCodex—A free, daily newsletter for the crypto-curious
The Fed’s historic series of interest rate hikes over the past year crashed both cryptocurrencies and stock markets, while increasing pressure on the banking industry.
This year, traders have begun betting that the Fed will soon declare victory in its war on inflation and flip dovish, but Fed Chairman Jerome Powell and other Fed officials have vowed to stop inflation completely before easing monetary policy.
“Bitcoin’s rally has taken on something of a new dimension in 2023,” Simon Peters, a market analyst at brokerage eToro, said in an emailed statement.
“Unlike last year where cryptoassets took losses along with financial worries and general setbacks in the investment markets, bitcoin has become something of a rallying point for investors and seems to be living up to its ‘digital gold’ character at the moment. has a long way to go before even thinking about a new all-time high, but it shows price stability where there was none last year.”
Follow me on Twitter.
