If the US defaulted on its debt, what would the impact be on cryptocurrencies?
Many experts see the impending fall of the dollar on the horizon due to the United States’ over-spending, over-leveraging, and rising tensions with BRICS nations, particularly China and Russia.
![us-dollar-collapse-clock.png](https://steemitimages.com/DQmbDdE91Fd64VyaDqSuBDxGmzo1acsqemxnfR2QcYruT74/us-dollar-collapse-clock.png)
If the dollar were to fall, it is fair to assume that it would take with it any industries, companies, or assets closely tied to it. If the dollar were to collapse to worthlessness as has happened with many nations over the years, from Germany in the 1920’s to Venezuela today, then anyone who has had savings in dollar would be virtually reset to zero. Apple’s 250 bn cash savings would be worth perhaps a few thousand to a few million, and their stock would undoubtedly come crashing down taking a significant hit.
But any industry, company, or asset not tied to the dollar would surge. People would view it as a safe haven for their money. And these are the two likely options:
Bitcoin/NEM/DASH/Others: Keep in mind that not all crypto-currencies are created equal. Though all are capable of being transacted, many were not created to be for simple binary purely financial transactions. Coins like Ethereum are there to power smart contracts, so I would not neccesarily see it as the place people would put their money instead of the dollar. Since the Crypto Space is new to most people there are somewhat blurred lines, but once people start utilizing the various blockchains, it will be a natural transition putting their money on their go to financial transactions blockchain which would as a result surge.
SDR: This is not shorthand for a coin before you go looking it up… This stands for Special Drawing Right, a new currency the IMF (international monetary fund) has been cooking up over the years and actually used in various situations to help governments out and facilitate international commerce when politics got in the way through account freezes and embargos. Dollar-pocalypse believers, such as James Rickards, who wrote the books Currency Wars and the Death of Money, believes that SDR’s are a viable option to replace the Dollar amidst a collapse due to its speed of implementation. It’s not tied to one country, and is essentially a-political. However compared to Bitcoin it is still far more elitist, centralized, and undemocratic, so I have an easier time seeing the masses turn to crypto-currencies amidst a panic.
Other Venues:
Gold, Real Estate, Collectibles: These generally hold value, however they won’t be as stable in price. Why? Because they are not as liquid as Crypto’s or SDR. Say you work at a company that suffers due to the dollar collapse, and you lose your job. You own a home, and have no way to pay your bills and need to downsize. Few people will have the money to purchase Real Estate, and if they do, they will likely dictate the price and you will get whatever they are willing to give you. And Gold is almost as impractical as an exchange currency.
So at the end of the day, crypto currencies have a bright future.