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Blackrock CEO Says US ‘Debt Ceiling Drama’ Is Bad for Dollar, Bitcoin May Benefit
The CEO of investment management company Blackrock is not excited about the ongoing attempt to raise the US debt ceiling. CEO Laurence Fink recently spoke about the “drama” surrounding the debt ceiling increase while discussing inflation and other issues. Observers believe the ongoing situation may turn out bullish for Bitcoin.
Speaking at a financial services conference organized by Deutsche Bank, Fink rightfully predicted on Wednesday that there would be a resolution to the debt ceiling debate. However, the CEO noted that raising the debt ceiling is bad because it reduces global trust in the dollar. Finks said:
“I believe we’ll have a resolution, … but let’s be clear, the United States is jeopardizing its reserve currency status.”
Fink suggested that the US dollar has remained the leading reserve for a while now. However, he mentioned that the continuous conversations about raising the country’s debt ceiling and the possibility of default are factors that can destabilize the dollar:
“We are eroding some of that trust, which in the long run we need to rectify and rebuild.”
Blackrock CEO Worries about Debt Ceiling and Inflation but Downplays Recession
Speaking at the conference, FInk also discussed inflation and interest rates. Although the US Federal Reserve has raised interest rates at least 10 times since last year, Fink expects two more. According to him, the Fed has to be more observant even though the market is very resilient. However, he believes there will be more increases in interest rates because he doesn’t see any evidence of inflation reducing.
Regardless, Fink is generally bullish on the economy. He thinks the likelihood of a recession in the US is low. According to him, if a recession happens, it may not be ugly.
Could the Increase in the US Debt Ceiling be Good for Bitcoin?
The discussions around inflation and the US debt ceiling bring Bitcoin back into the light. The largest cryptocurrency by market cap, Bitcoin is the first choice for many enthusiasts and members of the crypto community looking for a hedge against inflation. Since Bitcoin is independent of government control, investors have and may continue to use it to hedge against uncertain monetary policies.
eToro markets analyst Josh Gilbert believes that Bitcoin’s finite supply and independence showcase the king coin’s utility, especially considering the banking crisis and the debt ceiling deal. However, he says investors should not consider the ongoing problems as catalysts for a Bitcoin spike.
Speaking to Cointelegraph, Gilbert said the general uncertainty in the financial climate has caused “more fear than optimism”. He also believes that these events will cause liquidity issues.
Fineqia International research analyst corroborates Gilbert, as he believes that investor fears in reaction to the debt ceiling deal tanked Bitcoin’s price. According to CoinMarketCap data, Bitcoin is trading at $26,913 after climbing nearly 2.5% over the last 7 days.
Blackrock CEO Says US ‘Debt Ceiling Drama’ Is Bad for Dollar, Bitcoin May Benefit
