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The US Treasury is running out of cash — trouble ahead for Bitcoin?

The US Treasury is running out of cash — trouble ahead for 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 latest Macro Markets show discusses the impact of the United States debt crisis as the government quickly runs out of money, a billionaire’s investor alert for an incoming economic bubble burst, and why Walmart’s better-than-expected earnings are a warning sign for investors.

According to Pechman, the government has incentives to show desperation and scare the general public into pressuring Congress to approve another increase to the debt ceiling. The risks of a government shutdown and subsequent default exist, which could lead to a wave of bankruptcies and stock market crashes as people rush to liquidate assets for cash.

In such a “black swan” scenario, Bitcoin (BTC) could face a 40% to 80% drop in a couple of days, according to Pechman. But there’s a catch: why would investors keep huge cash positions after the dust settles? As soon as the government raises the debt and issues more money, it’s instantly diluted.

Next, Pechman discusses billionaire investor Stanley Druckenmiller’s warnings of the “biggest and probably broadest asset bubble.” Stanley believes that what we’re seeing right now in terms of unemployment, delinquency rates and corporate earnings is completely masqueraded by artificially low interest rates.

Lastly, Pechman debates Walmart raising its full-year outlook as first-quarter sales top expectations. According to Walmart’s CEO, the consumer discretionary sector is not doing well. The sector’s performance is quite the opposite, with higher incomes moving away from more expensive stores and moving to low-cost retailers.

Pechman explains that such news should initially concern Bitcoin and crypto investors since the younger audience is highly relevant to demand. Therefore, as Drukenmiller said, be prepared for unbelievable opportunities ahead.

If you are looking for exclusive and valuable content provided by leading crypto analysts and experts, make sure to subscribe to the Cointelegraph Markets & Research YouTube channel. Join us at Macro Markets every Friday.