How Will Wiping US Student Debt Impact the Crypto Market?
United States President Joe Biden announced the cancelation of a substantial $127 billion student debt burden for approximately 3.6 million citizens in the United States.
The announcement received a varied response, with some speculating about crypto’s price. Meanwhile, others questioned the specific method behind the debt clearance.
US Government Canceling Student Debt Receives Mixed Response
On X (formerly Twitter), Biden’s announcement that the US Government has cleared student debt across the nation generated a flurry of responses. He reiterated that it was “a big deal.”
Prominent market commentator Mike Alfred shared with his 134,500 followers that this could potentially be a positive indicator for Bitcoin’s price.
“Yes because it ensures Bitcoin will appreciate.”
However, others were concerned over how it might affect the future coming years. One X user stated that it will be “more burden for taxpayers,” when another questioned the legitimacy of Biden’s statement:
“It isn’t “cancelled” when the rest of us have to pay for it.”
The debt forgiveness could potentially enable individuals who were previously burdened with debt to explore investment opportunities in crypto.
In January 2021, as the US Government distributed Covid-19 stimulus checks, the crypto market experienced a historic surge.
The total market capitalization of the market surpassed $1 trillion, and Bitcoin reached its all-time high of approximately $65,000 around the same period.
At the time of publication, Bitcoin’s price stands at $27,961.
Bitcoin Price Chart 1 Month. Source: BeInCrypto
This comes amid the US national debts level reaching all-time-highs. On September 19, BeInCrypto reported that for the first time in history, total US Federal debt has exceeded $33 trillion. President of the Committee for a Responsible Federal Budget, Maya MacGuineas:
“The United States has hit a new milestone that no one will be proud of: our gross national debt just surpassed $33 trillion.”