So the United States is about to hit its debt ceiling. It has a few options:
What would a U.S. debt default do to the price of Bitcoin? What would it do to the value of Bitcoin (not denominated in USD)? Is the risk of a U.S. debt default already priced into the market? Or are Bitcoin traders not thinking about it?
- Raise the debt ceiling, as it has done in the past, and continue financing the deficit by taking on debt.
- Do something silly like http://www.correntewire.com/coin_seigniorage_and_irrelevance_debt_limit.
- Eliminate large social programs and/or defense spending, thus eliminating the deficit.
- Default on the debt.
What would a U.S. debt default do to the price of Bitcoin? What would it do to the value of Bitcoin (not denominated in USD)? Is the risk of a U.S. debt default already priced into the market? Or are Bitcoin traders not thinking about it?
I think people run to historical safety: gold, silver, etc. People who believe in bitcoin may grab some more, but all the folks who are toying with it will want their money is something perceived as rock solid, and bitcoin is not what they're going go to. Thus, I think the price of bitcoin drops in this scenario.
That said, the US won't default. Some dumbass irrelevant deal will be made that pushes the problem down the road a little more.
