Good day. This is what is happening:
Prices: Bitcoin at $26.8K maintains its debt ceiling holding pattern.
Perspectives: Cryptocurrencies as a hedge? Citizens of two large emerging countries and other major economies appear to be turning to digital assets as their currencies struggle.
Bored Bitcoin sleeps close to $27K
Bitcoin stayed comfortably in its most recent range on Monday as investors weighed in on the latest developments in the US debt ceiling deadlock.
The largest cryptocurrency by market capitalization was recently trading at around $26,866, up 0.4%. BTC has hovered between $26,500 and $27,500 for nearly two weeks, according to CoinDesk data, amid macroeconomic uncertainties, including concerns that US President Joe Biden and the House leadership may not reach a compromise. agreement on increasing the country’s debt limit.
“Cryptocurrency traders are unsure how Bitcoin will perform over the next few days of debt ceiling negotiations,” Edward Moya, a senior market analyst at forex market maker Oanda, wrote in a note.
Moya added: The risk of a default is very small, but if it did happen, it could feel like a major hit to risk appetite, sending cryptocurrencies much lower. Bitcoin appears to be content to trade near the lower limits of its recent trading range between $26,500 and $30,000.”
Since 1960, the government has raised the debt limit 78 times, but the current tense political environment has raised anxiety about lawmakers’ willingness to work together.
In a letter to House Speaker Kevin McCarthy (R-Calif.), US Treasury Secretary Janet Yellen reiterated a May 15 warning that without a deal, “the Treasury Department will not it could meet all government obligations in early June and potentially as early as June 1.”
“We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious damage to business and consumer confidence, increase borrowing costs in the short term. for taxpayers and negatively affect the credit rating of the United States. United,” Yellen added. “We’ve already seen Treasury loan pots rise substantially for securities maturing in June.”
Ether recently changed hands at around $1,820, up 0.8%. The second largest cryptocurrency by market value has ranged similarly between $1,750 and $1,850 over the past two weeks. Other major cryptocurrencies were largely in the green, albeit in paler shades, with TRX and AVAX, smart contract platform tokens Tron, and Avalanche recently rising 3.8% and 2.3%, respectively. The CoinDesk Market Index, a measure of the performance of crypto markets, recently rose 0.4%.
Among major stock indices, the technology-focused Nasdaq Composite rose 0.5% to hit a 2023 high, while the S&P 500, which has a vital technology component, and the Dow Jones Industrial Average (DJIA) rose a 0.2% and 0.4%, respectively. Treasury yields rose and the price of gold dipped slightly to $1,990, well below its near-record high earlier this month, when investors were turning more to safe-haven assets.
Meanwhile, in an interview with CoinDesk TV’s “First Mover” show on Monday, Ahmed Ismail, CEO of quantization-based liquidity aggregator Fluid, said the withdrawal of market makers Jane Street and Jump Trading from trading of cryptocurrencies in the US had spooked investors, diminishing an already dwindling supply of market liquidity.
“One of the big problems that crypto suffers from is that liquidity becomes massively fragmented, and events like this only exacerbate the problem,” Ismail said. “So what we’re seeing right now is there’s not a lot of activity because liquidity is even more fragmented and the markets are very inefficient. As a result, you’ll see that I think we’re seeing a return of certain narratives.
Ismail noted a rise in call options on the Bybit cryptocurrency exchange, a sign of unease over the debt ceiling and other macroeconomic uncertainties. “The narrative of people pulling liquidity because they are afraid of what is going to happen and the uncertainty around the debt ceiling, that is certainly a big problem to keep (the) crypto crisis so limited now.”
With the US mired in political stasis while other regions build crypto frameworks, the evolution and outlook for on-the-ground demand for crypto assets is worth watching. This is becoming increasingly relevant as many large countries battle soaring inflation, unstable currencies, and autocratic control over financial access, and as populations become increasingly cryptocurrency-aware and lack of it grows. of trust in centralized institutions.
Noelle Acheson is the former director of research at CoinDesk and Genesis Trading. This article is taken from her Crypto is macro now newsletter, which focuses on the overlap between the changing crypto and macro landscapes. These opinions are his own and nothing he writes should be taken as investment advice.
On the surface, this may sound like an overreaction to the FATF’s crypto stance: Last Thursday, the organization’s president released a letter titled “The End of the Lawless Crypto Space” urging crypto regulation rather than a full ban.
Furthermore, Pakistan has a somewhat strained relationship with the FATF, and last October was removed from its “grey list” (which labels certain countries with “deficiencies” in their AML controls, which in turn can lead to a limited participation in global markets). finance).
Nor is it difficult to see the hand of the International Monetary Fund. Pakistan is currently in talks with the organization over a bailout package, though negotiations appear stalled and concerns over the country’s political and economic problems are beginning to affect neighboring nations. The IMF has not been shy about its unease with the crypto markets, and a few months ago, reports surfaced that it had applied crypto suppression conditions to negotiations with Argentina.
Read the full story here:
Data from Glassnode revealed that bitcoin (BTC) is stabilizing in the tightest price range it has seen in months, despite looming concerns about the stability of regional US banks and the debt ceiling of the country. FLUID CEO Ahmed Ismail shared his analysis of crypto markets. Additionally, Polygon co-founder Sandeep Nailwal spoke about launching a Web3 scholarship program. And, Litecoin Foundation managing director Alan Austin weighed in on the recent spike in Litecoin activity amid the frenzy surrounding ordinals.