Debt Ceiling Drama: Potential Impact on Bitcoin and Forex Markets
TL;DR
Analysts warn that a potential deal to raise the US government's $31.4tn debt limit may bring pain to the crypto market. Once the debt limit is raised, the Treasury will look to build back its cash balance by issuing government bonds, which may suck out liquidity from the system and put upward pressure on bond yields. Bitcoin is known to move in the opposite direction of bond yields, so a potential deal might eliminate major economic uncertainty, but assets like bitcoin that are heavily dependent on fiat liquidity could suffer.
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- Traders on Alert as Debt-Limit Deadline Draws Near: Markets Wrap Yahoo Finance
- Debt ceiling debacle erodes US dollar’s attraction as world’s reserve currency South China Morning Post
- Debt ceiling drama: Will the US avert default and impact forex markets? FXStreet
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