Good morning Here’s what happens:
Prices: Bitcoin maintains its debt ceiling hold pattern at $26.8k.
Insights: Crypto as a hedge? Citizens in two major emerging markets and other major economies appear to be turning to digital assets as their currencies struggle.
Boring Bitcoin is just under $27,000
Bitcoin held comfortably within its recent range on Monday as investors weighed recent developments in the U.S. debt ceiling standoff.
The largest cryptocurrency by market cap recently traded at around $26,866, up 0.4%. According to CoinDesk data, BTC has been floating between $26,500 and $27,500 for nearly two weeks amid macroeconomic uncertainties, including concerns that US President Joe Biden and House leaders may be unable to reach an agreement on raising the debt ceiling of the country to achieve.
“Crypto traders are unsure how Bitcoin will fare over the next few days of debt ceiling negotiations,” Edward Moya, senior market analyst at forex market maker Oanda, wrote in a note.
Moya added, The risk of default is very small, but if it did, it could feel like a risk appetite hit, leading to a significant decline in cryptocurrencies. Bitcoin appears content to trade near the bottom of its recent $26,500-$30,000 trading range.”
Since 1960, the government has increased the debt ceiling by 78 times, but the current, strained political environment has raised concerns about lawmakers’ willingness to cooperate.
In a letter to House Speaker Kevin McCarthy (R-California), US Treasury Secretary Janet Yellen reiterated her May 15 warning that without an agreement, “the Treasury Department would not be able to complete all of the government’s commitments by early June meet.” possibly as early as June 1.”
“We have learned from past debt limit impasses that waiting until the last minute to suspend or raise the debt limit seriously damages business and consumer confidence, increases short-term borrowing costs for taxpayers, and negatively impacts the creditworthiness of the United States.” can.” States,” Yellen added. “We have already seen that the Treasury’s borrowing capacity for securities maturing in June has increased significantly.”
Ether recently changed hands around $1,820, up 0.8%. The market value of the second largest cryptocurrency has also fluctuated between $1,750 and $1,850 over the past two weeks. Other major cryptos have mostly been in the green, albeit paler, with TRX and AVAX, the tokens of smart contracts platform Tron and Avalanche, recently up 3.8% and 2.3%, respectively. The CoinDesk Market Index, a measure of the performance of crypto markets, recently rose 0.4%
Among the major stock indexes, the technology-backed Nasdaq Composite rose 0.5% to hit a 2023 high, while the S&P 500, which includes a key technology component, and the Dow Jones Industrial Average (DJIA) rose 0.2% and 0.0%, respectively .4% up. Treasury yields rose and gold fell slightly to $1,990, well below its near-record peak earlier in the month as investors turned to safe havens.
Meanwhile, Ahmed Ismail, CEO of quantum-based liquidity aggregator Fluid, in an interview with CoinDesk TV’s “First Mover” show on Monday, said the withdrawal of market makers Jane Street and Jump Trading from crypto trading in the US has spooked investors and an already dwindling supply of market liquidity has declined.
“One of the very big problems that crypto is struggling with is massive liquidity fragmentation, and events like this only make the problem worse,” Ismail said. “What we are seeing right now is that there is not much activity because liquidity is even more fragmented and markets are very inefficient. As a result, you will see that I think we are witnessing a return of certain narratives.
Ismail noted a surge in call options on crypto exchange Bybit, a signal of concern over the debt ceiling and other macroeconomic uncertainties. “The narrative that people are withdrawing liquidity because they are afraid of what is going to happen and the uncertainty about the debt ceiling, that’s certainly a big issue in keeping the crypto crisis so tight now.”
With the US stuck in political stalemate while other regions build crypto frameworks, it’s worth taking a look at the development and prospects for local demand for crypto assets. This is becoming more relevant as many large countries struggle with skyrocketing inflation, unstable currencies and autocratic control over access to finance, populations are becoming increasingly crypto-aware and trust in centralized institutions is increasing.
Noelle Acheson is the former Head of Research at CoinDesk and Genesis Trading. This article is an excerpt from her Crypto is now macro Newsletter focused on the intersections between the changing crypto and macro landscapes. This opinion is her own and nothing she writes should be construed as investment advice.
At first glance, this may sound like an overreaction to the FATF’s crypto stance — last Thursday, the organization’s president released a letter titled “An End to the Lawless Crypto Space,” calling for crypto regulation instead of outright ban demands.
On the other hand, Pakistan has a somewhat strained relationship with the FATF and was only removed from the “grey list” (which categorizes certain countries as “deficiencies” in their AML controls, which in turn may result in limited participation in global action) as recently as last October finance).
It’s not hard to spot the hand of the International Monetary Fund either. Pakistan is currently negotiating a rescue package with the organization, but negotiations appear to have stalled and concerns about the country’s political and economic problems are beginning to spill over into neighboring countries. The IMF is not shying away from its discomfort with the crypto markets, and a few months ago reports surfaced that it applied crypto-suppression conditions in its negotiations with Argentina.
Read the whole story here:
Glassnode data showed that Bitcoin (BTC) is settling in its tightest price range in months despite looming concerns over the stability of US regional banks and the country’s debt ceiling. Ahmed Ismail, CEO of FLUID, shared his analysis of the crypto markets. Additionally, Sandeep Nailwal, co-founder of Polygon, discussed the launch of a Web3 grant program. And Alan Austin, executive director of the Litecoin Foundation, commented on the recent spike in Litecoin activity amid the excitement surrounding Ordinals.