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Lack of Trust in Dollar Due to Debt Ceiling Drama, BlackRock CEO

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Lack of Trust in Dollar Due to Debt Ceiling Drama, BlackRock CEO
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Laurence Fink, CEO of BlackRock stated that the issues and drama that has been going around related to the United States debt ceiling has damaged Global trust on the U.S. dollar. Due to this few analysts have reasons to believe that Bitcoin can face some hurdles ahead. 

U.S. Debt Ceiling Raised 

Fink’s comments on the Dollar comes after the much awaited decision on the U.S debt ceiling came on May 31. The U.S. house of representatives after lots of clashes passed the bill to lift the country’s $31.4 trillion debt ceiling. 

The bill will now move forward to the Senate where a few days of discussion and debate is again expected. As informed by the U.S. treasury, June 5 is the deadline for raising the debt ceiling. Any inaction within that period will take the U.S. towards its first ever catastrophic default. 

According to a reputed media house report on May 31, during the Deutsche Bank Financial services conference, Fink told the attendees that he is expecting two more rate hikes from the Feds in the upcoming meetings. He also stated that there is no evidence whatsoever of overall inflation reducing. 

Fink added that there will be a resolution in the future but as of now the United States is deteriorating its reserve currency status. Amidst the high inflation, many Bitcoin believers and investors see it as a hedge against the rising inflation and debt ceiling fears which have been caused by the central banks. 

Investors turn to Bitcoin 

Market analyst at eToro, Josh Gilbert told one of the media houses that the drama related to the debt ceiling has caused Bitcoin to come into the spotlight once again. Due to its finite supply, and being an asset outside the control of the current financial system, investors are looking at Bitcoin as a much safer asset.  

He stated that the deal with the debt ceiling has highlighted the value that Bitcoin holds as it doesn’t come under the traditional finance system. He highlighted that Bitcoin can never face the problems that U S. Government is facing it right now because Bitcoin has finite supply. 

Despite all the positives of Bitcoin and how it can be used in such a situation of Debt-ceiling and risk of default, Gilbert has asked to reduce investors expectations. 

Gilbert stated that due to the debt ceiling issue there is more fear than optimism in the short term. He further added that the recent price surge in Bitcoin was due to the failure of banks and muting of inflation to an extent. 

Talking about Bitcoin Gilbert stated that given how Bitcoin went through the crypto winter of 2022, along with the high-interest rate environment changing gave investors a hope to buy bitcoin at heavy drawdowns. In the recent few weeks the scenario around rate hikes have changed significantly.

With the assessment and analysis that Gilbert is making and with Fink’s rate hike fears Bitcoin can be seen falling from the further levels. Although Gilbert added that if situations change and rate hike is paused then an upside movement from here for Bitcoin can be expected.

As of now Bitcoin is between the levels of $27,000 to $26,8000, down 2% from yesterday and 6.4% over the last one month. 

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