Blockchain.com CEO Says US Default Would Hit Crypto Initially

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[1/2] Representations of virtual cryptocurrencies are seen in this illustration taken November 28, 2021. REUTERS/Dado Ruvic/Illustration

DUBAI, May 25 (Reuters) – A U.S. government default would trigger an initial pullback in cryptocurrencies followed by a “push up”, the CEO of London-based crypto firm Blockchain.com said on Thursday.

The US government could fall behind on its bills next month – and even default on its debt – if Congress fails to raise a $31.4 trillion cap on government borrowing, a failure that could trigger economic calamity and panic in global financial markets.

In the short term, “a US default or a US recession is probably bad for crypto. These are risky assets, and you want to take risk,” Blockchain.com CEO Peter Smith said at the Economic Forum. of Qatar, hosted by Bloomberg.

“Over a long horizon, they’re probably good for crypto… If the US government defaults, we’re likely to see a quick pullback and then a very strong upward push in the crypto market.”

The cryptocurrency market has followed cyclical patterns and although 2022 was “quite painful”, it is recovering this year and 2024 will be “another exponential year”, Smith said.

Blockchain.com, which offers users a crypto wallet and is also a crypto exchange, is planning to expand its small Middle East office in Dubai Mall.

“The (Dubai) government is in a very healthy consultation process with industry and on regulations… I think as long as these end up where we think they will, we will probably invest heavily in Dubai” , did he declare.

Last September, Blockchain.com signed an agreement with Dubai crypto regulator Virtual Assets Regulatory Authority (VARA) and has since opened an office and hired staff.

Currently, the company is investing the most to consolidate its operations in Singapore and Europe, Smith said.

Reporting by Andrew Mills; written by Tala Ramadan; edited by Jason Neely

Our standards: The Thomson Reuters Trust Principles.

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