In the latest crypto market news, US President Joe Biden and top Republican Kevin McCarthy are gearing up to restart talks on the debt ceiling deal this Monday. As the debt limit negotiation team from the White House arrives at Capitol Hill, the deadline pressure mounts with a potential default on some US Federal debts looming if the deal is not reached by June 1, 2023. The White House previously warned that the stock markets might experience a devastating 45% downfall if the US defaults.
This comes amid recent remarks by President Joe Biden regarding the lack of support for the crypto traders in the deal, sparking a row among the crypto trader community. In response, some traders have vowed not to support Biden in the upcoming US election in 2024 due to his government’s stance on Bitcoin.
On the other hand, it is worth noting that recent macroeconomic uncertainty has worked in favor of the crypto market. Many investors opted for high return, high-risk investment options. Therefore, the lack of clarity regarding the debt ceiling deal will keep uncertainty and instability dominant in the financial market, regardless of the outcome by the June 1 deadline.
Some crypto enthusiasts argue that a debt ceiling deal, whether it raises the ceiling or causes default, could benefit Bitcoin. More specifically, relief in the markets would trigger BTC price jump if the deal is reached, while fear and uncertainty would transform Bitcoin into a safe bet if the talks ultimately fail. As a result, the upcoming months could potentially offer a smooth sailing for the cryptocurrency market.
On the flip side, should the US Federal Reserve decide to pause the interest rate hike spree, the crypto market might experience positive momentum as it assimilates this development in the economy.
In summary, both positive and seemingly negative outcomes of the debt ceiling talks may provide different benefits to the cryptocurrency market. While the resolution of the deal may lead to short-term price jumps, prolonged uncertainty and the resulting shift of investors towards high-risk investments could potentially strengthen the position of cryptocurrencies, including Bitcoin, as safe harbors. Hence, it’s essential for investors to conduct thorough market research before making any decisions in the highly dynamic and often unpredictable world of cryptocurrencies.
Source: Coingape
