US debt will push people to invest in the Crypto World

The US debt might end up with a bull run in the cryptocurrency space. This time, ShapeShift CEO Erik Voorhees explained that the US debt could create a big spike in the cryptocurrency world. At the moment, the US debt is close to $21.7 trillion dollars.

Erik Voorhees, a prominent cryptocurrency expert explained why the US debt could generate a new bull run in the crypto market. He said that if there is a new financial crisis, the world would realize that the US debt cannot be paid back. After it, the government would end up printing more dollars.

About it, he mentioned: “When the next global financial crisis occurs, and the world realizes organizations with $20 trillion in debt can’t possibly ever pay it back and thus must print it instead, and this fiat is doomed. Watch what happens to crypto.”

With more inflation, fiat holders will lose purchasing power. This is something that can already be seen in some countries with large deficits without being able to take more debt. Venezuela, for example, could soon register an inflation that will cross 1 million per cent in a year.

Nevertheless, Voorhees is not the only one worried about the US debt. BlackRock, the world’s largest asset manager with more than $6 trillion dollars under management, has also expressed its opinion on the matter. It’s CEO, Larry Fink, stated that the government has a very big problem with its budget deficit.

He mentioned that there is a rising inflation rate in the US and an interest rate that grows higher and higher. This could not be sustainable.

“That could be the real issue related to everything: where we have interest rates becoming too high to sustain the economy with its growing rates,” he said.

Nouriel Roubini, a professor at NYU Stern School and a cryptocurrency skeptic, echoed the sentiment of Fink, emphasizing that the interest rate has increased to a point in which the US economy cannot match it with its growth rate.

“Second, because the stimulus was poorly timed, the US economy is now overheating, and inflation is rising above target. The US Federal Reserve will thus continue to raise the federal funds rate from its current 2% to at least 3.5% by 2020, and that will likely push up short- and long-term interest rates as well as the US dollar,” Roubini said, predicting a major financial crisis by 2020.

If a financial crisis is to occur by the end of 2020 as predicted by many economists in the US primarily due to the overly high-interest rate set forth by the Federal Reserve, then the US dollar could drop substantially in value and open up investors to stores of value such as gold and cryptocurrencies whose value is not dependent of the global economy.

At the time of writing, the whole cryptocurrency market has a $210 billion dollars’ value. At the end of the last year and the beginning of this one, the total market capitalization was close to $900 billion dollars. If there is a new bull run in the crypto space, the total crypto value could surpass $1 trillion dollars.