Bitcoin bulls have had a good year so far. If the US fails to repay its debt, it could get even better, at least in terms of investing in Bitcoin.
That’s according to Geoff Kendrick, head of digital asset research at Standard Chartered. He told the insider this week that a US default – which he called a “low-probability, high-impact event” – could send Bitcoin up around $20,000, an increase of nearly 70% from current levels .
Bitcoin started the year well below $17,000, but is now hovering around $30,000. That’s still a long way from its all-time high of nearly $69,000 in November 2021, and some investors who bought Bitcoin around that time are no doubt still licking their wounds.
Bitcoin, predicts Kendrick, would do well even if global cryptocurrencies, which trade more like stocks, did not. “So in fact the optimal trade would probably be long Bitcoin, short Ethereum. That kind of mix would probably be a good expression of that,” Kendrick told Insider.
Monday Kendrick said in a note Bitcoin could reach $100,000 by the end of 2024 and the “crypto winter” was over. He added that Bitcoin has benefited from its status as a “branded safe haven, a store of perceived relative value, and a means of transferring funds.”
The price of Bitcoin soared earlier this year after the collapse of Silicon Valley Bank and mounting fears of a banking crisis.
Meanwhile, the debt ceiling crisis intensified. On Wednesday, House Republicans passed legislation (barely) that would raise the government’s debt ceiling in exchange for spending restrictions. In the coming weeks, they will attempt to reach a compromise with President Joe Biden that would lift the country’s debt.
If the United States defaulted on its debt this summer, the consequences would be dire for America and the world. Last month, Treasury Secretary Janet Yellen warned lawmakers that “a default on our debt would trigger economic and financial catastrophe.”
Few people think it will come to this.
But even without a US default, many Bitcoin bulls see good things ahead. ARK Invest CEO Cathie Wood said in February that in five years Bitcoin will be “around $670,000 something like that and then by 2030 as we see more use cases and more these insurance policies taken out against tax plans and policies that are not healthy, we think it could exceed $1 million.
Bitcoin has a lot of critics and doubts, of course. Mark Mobius, the billionaire co-founder of Mobius Capital Partners, predicted in December that Bitcoin would fall to $10,000 at some point this year. He has said of bitcoin“It’s not an investment, it’s a religion.”
Earlier this month, Berkshire Hathaway CEO Warren Buffett reiterated his longstanding skepticism. “Something like bitcoin is a gambling token, and it has no intrinsic value,” he told CNBC. scream box. “But that doesn’t stop people from wanting to play roulette.”