The bank failures of recent weeks would tend to push encourage investors to find new ways to protect their investment. Especially since even the US treasury, the largest of the banks, seems fragile. Among the alternative means, bitcoin is very much mentioned.
The risk-free interest rate no longer works
On a podcast most of which was shared by Blockworks, Avi Felman and Jonag Van Bourg discussed possible market reactions to a technical fault. The first is head of digital assets trading at Goldenteee, and the second is global head of trading at Cumberland. According to them, a technical fault would occur if the United States even briefly holds on to the bondholder redemption.
Regarding the reaction of bitcoin if this were to happen, Felman responds “ My bet is that the title sends us beyond $30,000, maybe $35,000 “.
Van Bourg is even more optimistic since he declares: ” I think we could definitely see all-time highs in a short time if the US were to default. »
” Whoever you are, wherever you live in the world, if you have a spreadsheet that contains money, you need to rewrite some cells and formulas if the United States is missing. For example, the risk-free rate is no longer risk-free. »
The big winner bitcoin from a technical default of the US Treasury?
According to Van Bourg, a defect could be ” the most significant event in financial history “. According to him, bitcoin prices could reach or even exceed the historic peak of 70,000 $. “I think you would see people moving money from fiat to crypto in droves if fiat suddenly became unstable. ” he added.
But Felman prefers to be more cautious. For him, it is impossible for prices to reach historic highs “ Mainly because I just don’t know where this purchase came from “. A price run towards $35,000 would be more realistic. Thus, the cause would be wealthy buyers who themselves would attract new retail buyers.
Bitcoin hit a high near $70,000 when the whole world was undergoing a confinement quite severe. Holding cryptocurrencies was a good way to pay online. With the pandemic behind us, what else could cause such a spike?
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