The US debt ceiling has recently become a significant point of discussion within the cryptocurrency sphere. House Speaker Kevin McCarthy and President Biden have expressed optimism about passing the debt ceiling deal, which is essential to prevent the US government from defaulting. Many believe that the outcome of the debt-ceiling and the forthcoming budget will impact crypto assets, as Treasury efforts to reduce spending could potentially diminish dollar liquidity. However, could it be that certain cryptocurrencies might benefit from this scenario?
As the US approaches its statutory debt limit of $31.4 trillion, the Treasury is being pressured to reduce its General Account (TGA) balance to keep the government operating. With the debt-ceiling deal’s deadline looming, analysts warn of possible negative effects on the crypto market. Noelle Acheson, former head of research at CoinDesk and Genesis Trading, and author of the Crypto is Macro Now newsletter, suggests a pessimistic outcome for risk assets like Bitcoin. Acheson explained that higher yields on government instruments resulting from debt issuance might negatively impact the prices of Bitcoin and gold, which usually perform poorly in high-yield environments.
Satyakam Gautam, a rates trader at ICICI Bank, an India-based bank, also voiced concerns about the potential detrimental effects of the debt ceiling situation on crypto markets in a LinkedIn post. Nonetheless, while the ongoing debt-ceiling crisis might bode ill for Bitcoin and other cryptocurrencies, meme coins such as Wall Street Memes (WSM) could potentially see a surge. As a meme coin, WSM’s value is tied to internet memes and is not dependent on dollar liquidity or virality. This means that while traditional cryptocurrencies might struggle amid debt ceiling anxiety, projects like WSM that focus on AI technology and the popularity of memes could navigate the challenging environment.
Launched on May 24, the WSM meme coin project has already raised over $940,000, and the token is about to enter the third presale stage, with a price of $0.0256. As of the time of writing, one WSM token is worth $0.0253, representing a 2% increase from its presale stage one price. In conclusion, while the outcome of the debt-ceiling deal might be unfavorable for Bitcoin and other existing crypto assets, meme coins like WSM could potentially soar in these uncertain times by capitalizing on the current popularity of memes and AI technology.
Source: Cryptonews
