As crypto and equity markets dipped into the red, investors are paying close attention to hawkish comments made by Federal Reserve governors and any signs of a debt deal. Bitcoin (BTC) has lost as much as 3.2% in the past 24 hours, while ether (ETH) declines by 2.8%. This performance puts BTC on track to post its first negative monthly return of the year, losing close to 8% in May. On the other hand, ETH has lost around 0.2% throughout the month.
Though stocks fared better, they still concluded Wednesday’s trading session lower, with the S&P 500 and Nasdaq Composite Indexes both losing about 0.4%. The tech-heavy Nasdaq has recently outperformed, as lawmakers remain engaged in discussions around the quickly approaching debt ceiling deadline. Consequently, the Nasdaq gained 4% over the last five trading days, overshadowing the S&P 500’s 1.5% return.
However, Noelle Acheson, the author of Crypto is Macro Now and former head of market insights at Genesis, suggests the rally for risk assets will not be sustainable. Acheson explains that while avoiding a default is a relief, the incoming wave of issuance will drain liquidity from the market and raise yields. According to the CME swaps market, this should equate
Source: Blockworks
