What would be the impact of a default on US Bitcoin debt?

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Macro Markets, hosted by crypto analyst Marcel Pechman, airs every Friday on the Cointelegraph Markets & Research YouTube channel and explains complex concepts in simple terms, focusing on the cause and effect of traditional financial events on the market. daily crypto activity.

The risks of a US debt default are the top topic of this week’s show, which comes from none other than Treasury Secretary Janet Yellen. Yellen warned of potential mass unemployment, defaults and widespread economic weakness if the United States did not repay its debts. This problem crops up every two years, creating tension in Congress, but at some point they agree to raise the debt ceiling. So no harm done, right?

This is partly true because if the government does not have a majority, which happens to be the case, the opposition has the upper hand in negotiating its demands. In this case, Republicans want President Joe Biden to drop $4.5 trillion on unhealthy projects, like forgoing some student debt or hiring thousands of Internal employees. Revenue Service.

Pechman explains how the event, regardless of the outcome, is bullish for Bitcoin (BTC) and discusses the chances of a government debt default and how the debt ceiling increase drives liquidity to the markets , favoring rare assets.

Macro Markets’ next segment focuses on Tesla, the EV automaker controlled by Elon Musk. First, the hell reviews its importance to bitcoin holders and the cryptocurrency industry, then summarizes the company’s financial terms and explains why the 9,200 BTC held by Tesla does not show any risk for Bitcoin price.

The show ends with a review of how short selling works. Unlike futures contracts, to sell a stock on margin, you have to borrow it from a holder. Typically, these rates are negligent, perhaps between 0.3% and 3% per year. However, when there are excessive bets against the stock price and the demand for shorts increases, this rate can reach 50% per year or become unavailable.

In the semi-failing First Republic Banks deal, which saw net redemptions of $100 billion in the previous quarter, short sellers are struggling to borrow the stock, but Pechman explains how that doesn’t matter problem for those who wish to bet on the action of the banks. price drop. According to Marcel, the First Republic Bank bailout may still propel Bitcoin above $30,000.

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

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