BTC soared to a three-week high following the announcement that the US government had reached a debt ceiling agreement.
During the Monday morning Asian trading session, cryptocurrency markets were positive. A debt ceiling agreement between U.S. President Joe Biden and leading congressional Republican Kevin McCarthy has provided the impetus.
The Congress has not yet approved the provisional deal to raise the $31.4 trillion debt ceiling for the federal government. Nevertheless, according to Bloomberg, it has increased risk appetite in international markets.
Bitcoin Has Turned Green Again
Head of trading at cryptocurrency exchange Independent Reserve, John Toro, stated: “This morning’s positive risk sentiment directly relates to the resolution of the debt-ceiling impasse,” before adding:
“Front-end funding costs remain highly elevated relative to crypto returns, resulting in negative carry for long holders. This will continue to prove a headwind for risk assets and the crypto complex.”
In the previous few hours, BTC surged to about $28,500, reaching its highest level since May 8. With a gain of 4% for the day, it has now slightly declined but is still above $28,000.
The longer-term perspective, nevertheless, still shows BTC consolidating sideways. The national debt that the Treasury may accrue is constrained by law by the debt ceiling. There is a limit to how much the federal government can borrow in order to pay off the debt it has already incurred.
The debt ceiling is at $31.4 trillion, and Treasury Secretary Janet Yellen issued a warning that a default was very likely in the absence of an agreement. There is now no cap on how much further debt the government can take on, as the agreement would postpone it until January 2025.
A Rise in the Crypto Market
The total market cap has increased by 3% on the day to $1.22 trillion. All cryptoassets have increased in value as a result of the $37 billion capital inflow, which also added some volatility to a market that had been rather stagnant recently.
For the first time since May 8, Ethereum had increased by 3.4% on the day to surpass $1,900. At the time of writing, the remaining altcoins were all up, although not by as much as Bitcoin, which was dominating markets on Monday.
Get free access to our lifetime VIP membership. Join us here
Leave a Reply