‘Worst in history’: Bitcoin suddenly hurtles toward $1.9 trillion after massive price crash

Bitcoin has stabilized after this week’s sudden price drop, although “extreme fear” threatens to cause further problems.

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Bitcoin prices have fallen to lows not seen since February as collapsed bitcoin exchange Mt. Gox sets a flood of bitcoins in motion.

Now, Federal Reserve Chairman Jerome Powell has warned of a “critical period.” Bitcoin prices are bracing for a 27% increase in the U.S. budget deficit next year to $1.9 trillion. Some believe this will support bitcoin prices.

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“Until the government stops spending money like drunken sailors … bitcoin as a core investment makes perfect sense to me,” Michael Novogratz, the CEO of crypto-focused financial services company Galaxy Digital, told me. CNBCand added that both former President Donald Trump and President Joe Biden “have been the two worst presidents, in terms of increasing debt, in the history of our country.”

Biden faced increasing calls this week to step aside and make way for a new Democratic Party candidate to take on former President and presumptive Republican presidential nominee Donald Trump.

The chances of Biden dropping out of the White House race this year have suddenly risen to 62% in recent days on crypto-based prediction platform Polymarket.

Last month, Treasury Secretary Janet Yellen issued a stark warning about the growing US$34 trillion national debt. Some believe the bitcoin price could reach $1 million in the next 18 months.

Interest payments on the U.S. government debt are expected to reach $870 billion this year, according to a recent analysis from the Congressional Budget Office. This comes after the Federal Reserve raised interest rates at an unprecedented pace amid skyrocketing inflation, a result of massive spending and money printing during the Covid-19 era.

The Congressional Budget Office reported this month that the U.S. budget deficit is expected to rise 27% next year, to $1.9 trillion.

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ForbesBillionaire Bitcoin Buyer Reveals Shocking Turnaround After Ethereum, XRP, Crypto Price Surge

Earlier this year, analysts at Bank of America warned that the US debt burden is on track to reach $1 trillion in 100 days, potentially causing the price of bitcoin to rise.

“The U.S. government debt is growing by $1 trillion every 100 days,” Michael Hartnett, chief strategist at Bank of America, wrote in a note to clients seen by him. CNBCand added that it is “no wonder that ‘debt devaluation’ is now reaching record highs.”

Hartnett predicted that the newly launched bitcoin exchange-traded funds (ETFs) that took Wall Street by storm last month are headed for a “boom year,” in part because of the collapse of the US dollar.

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