Geoff Kendrick, the head of forex research at the banking institution Standard Chartered, recently said that the price of bitcoin is likely to jump by $20,000 in the event of the United States defaulting on its obligations. According to Kendrick, while bitcoin is likely to surge when the U.S. defaults, other cryptocurrencies like ethereum are likely to go down.
U.S. Debt Default a ‘Low-Probability’ and ‘High-Impact Event’
As fears mount that the United States government may default on its debt obligations, Geoff Kendrick, a forex research head at Standard Chartered, said such an event would cause the price of bitcoin (BTC) to surge by more than $20,000. While Kendrick characterizes the default as a “low-probability, high-impact event,” he nonetheless suggested that the top cryptocurrency’s reputation for performing well when markets are down as well as its safe haven status means the nearly 70% surge in its price is possible.
However, the Forex analyst said he believes the surge will not commence immediately after the default. Instead, the surge is likely to be preceded by a price drop of $5,000 before it jumps by $25,000. According to Kendrick, only the price of bitcoin is likely to follow that trajectory while other cryptos like Ethereum are likely to fall when the U.S. defaults.
“So actually, the optimal trade would probably be long bitcoin, short ethereum. That sort of mix would probably be a good expression of this,” Kendrick said.
BTC to Top $100,000 by the End of 2024
As recently reported by Bitcoin.com News, Treasury Secretary Janet Yellen warned that the United States government is likely to default on its obligations on June 1 if Congress fails to raise or suspend the debt limit. According to Yellen, such an event would “produce an economic and financial catastrophe.”
Besides predicting the $20,000 price jump, Kendrick recently said the BTC would top $100,000 by the end of 2024. In a recently published note, the analyst reportedly listed the U.S. banking turmoil, the halving event, and the Federal Reserve rate hikes among some of the factors that are likely to help drive up the price of BTC. However, the note is said to exclude the much-talked-about U.S. debt default.
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