How would a US debt default impact Bitcoin?
Macro Markets, hosted by crypto analyst Marcel Pechman, airs every Friday on the Cointelegraph Markets & Research YouTube channel and explains complex concepts in layperson’s terms, focusing on the cause and effect of traditional financial events on day-to-day crypto activity.
The risks of a United States debt default are the first topic of this week’s show, which comes from none other than Treasury Secretary Janet Yellen. Yellen warned of potential mass unemployment, payment failures and broad economic weakness if the U.S. failed to pay its debts. This issue emerges every couple of years, creating some tension within Congress, but at some point, they agree to raise the debt limit. So, no harm done, right?
That’s partially true because if the government doesn’t have a majority, which happens to be the case, the opposition has the upper hand to bargain their demands. In this case, Republicans want President Joe Biden to drop $4.5 trillion in unsound projects, such as letting go of some of the student debt or hiring thousands of Internal Revenue Service employees.
Pechman explains how the event, whatever the outcome, is bullish for Bitcoin (BTC) and discusses the odds of a government debt default and how the debt ceiling increase drives liquidity to the markets, favoring scarce assets.
The next segment of Macro Markets focuses on Tesla, the EV automaker controlled by Elon Musk. Firstly, he’ll go over its importance for Bitcoin holders and the cryptocurrency sector then proceed to summarize the company’s financial conditions and why the 9,200 BTC held by Tesla doesn’t pose a risk for Bitcoin’s price.
The show concludes by examining how short-selling works. Unlike futures contracts, to sell a stock on margin, one needs to
Read more on cointelegraph.com
