During the last week, on May 22, 2023, US President Joe Biden sat with the Republican House Speaker Kevin McCarthy in order to resume the high-stakes budget negotiations. This meet up was followed by the dire need to predict the global financial chaos if US Congress could not agree on a deal that would help them raise what is known as the debt ceiling.
What is the debt ceiling?
Also referred to as the debt limit, debt ceiling is a law that sets a limit to the total amount of money that the government can borrow in order to pay its bills. It also includes the payment for federal employees, the military, Social Security, and Medicare, along with the interest on the national debt and tax refunds. If need be, the US Congress sets a vote, which determines their need to raise or suspend the ceiling if they need to borrow more.
This deal, after several weeks of bitter negotiations, still has the requirement to get approval by a divided Congress.
How is it Impacting the Crypto Markets?
The crypto and Asian stock markets have had a strong opening as the White House announced a deal that is avoiding a debt ceiling crisis. Following the same news Bitcoin and Ethereum have seen an increase of 5% and 4.9% in their values, respectively.
However, Bitcoin has seen a 2.8% drop in its value during the past month, owing to the weight of the debt ceiling crisis; as per CoinDesk Market Index, the price of BTC has crossed the $28K mark and is standing at $28,249, at the time of writing while ETH price is up 4.9% and is currently standing at $1,917.
The CEO of crypto fund manager BitBull Capital, oe DiPasquale, wrote, “Bitcoin found support around $25K and consolidated for about two weeks before rallying today. Whether this move continues till $30K remains to be seen, but we expect the market leader to test that key resistance once again in the near term.”
Following up on the discussion about the debt ceiling, as per various reports, House Speaker Kevin McCarthy has commented that there is still a lot of work that is left to be done on the bill. He has also shared that he is sensing the bill to be completed by Sunday, followed by a vote on Wednesday of this week. On the other hand, President Biden has said the deal is “an important step forward“, and has also called it a compromise.
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On the other hand…
The authorities at the Beijing Municipal Science & Technology Commission, which oversees the Zhongguancun Chaoyang Park, which are basically the top tech companies and academic institutions of China, released a whitepaper during the weekend; highlighting the Web3 policy of China.
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