Blackrock CEO Laurence Fink believes the recent “drama” around the United States debt ceiling has deteriorated global trust in the U.S. dollar, something that other analysts predict could provide some tailwinds for Bitcoin (BTC).
Fink’s comments come as U.S. lawmakers passed a highly-anticipated bill to lift the $31.4 trillion debt ceiling on June 1. The U.S. Treasury indicated that the deadline for raising the debt ceiling was June 5. Any later, the country could begin defaulting on its debts.
314-117: The House passes the Biden-McCarthy debt ceiling agreement, raising the debt limit until 2025 and instituting discretionary spending caps for two years.
71 Republicans and 46 Democrats voted “no” on the bill. pic.twitter.com/RdU42whDd5
— The Recount (@therecount) June 1, 2023
According to a May 31 report from Reuters, Fink told the attendees of a Deutsche Bank financial services conference that he expects at least two more interest rate hikes from the Federal Reserve in the coming months, claiming that he’d seen “no evidence” of overall inflation being reduced.
“I believe we’ll have a resolution, … but let’s be clear, the United States is jeopardizing its reserve currency status.”
Many Bitcoin advocates and cryptocurrency investors see BTC as a hedge against inflation and debt fears brought on by central banks increasing overall monetary supply.
Josh Gilbert, a markets analyst from eToro told Cointelegraph that the debt ceiling drama brings Bitcoin into the spotlight once again, as investors may seek finite-supply safe haven assets outside the constraints of the current financial system.
“The debt ceiling deal once again highlights Bitcoin’s utility because it’s essentially a break away from the traditional financial system. Given its finite supply, it’s free from the issues that the US Government is facing right now,” he said.
Still, Gilbert notes that while the U.S. banking crisis and the debt-ceiling debacle highlights the inherent utility of an asset like Bitcoin, any investors hoping for current events to provide a massive surge in the value of Bitcoin should tone down their expectations.
“There’s more fear than optimism in the short term due to the uncertainty of these issues and the liquidity problems they will cause,” Gilbert said. “When the banking crisis happened, it dialed down inflation and rate hike expectations, which is why we saw Bitcoin rally.”
These sentiments were echoed by Matteo Greco, a research…
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