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Qadir AK
Qadir AK
Author
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Jun 12, 2023 06:43 UTC
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Crypto Crash Looming – Debt Ceiling Deal and Its Potential Impact on Cryptocurrency Markets
Coin Bureau analyst thinks the crypto market could chop sideways as money markets rush to buy T-bills in the coming weeks.
The crypto market liquidity is, however, getting more mature as China through Hong Kong ventures in the digital asset industry.
Bitcoin dominance has scaled to a two-year high of about 49.25 percent, thus delaying an anticipated altcoin season.
The crypto market edged lower in the past week following heightened regulatory scrutiny from the United States and Nigeria. Notably, the Securities and Exchange Commissions from both countries intensified their crackdown on crypto exchanges for issuing unregistered securities.
Bitcoin miners accelerated their sell rate in the past few days as the underlying value dropped below $26k. The altcoin market continued to bleed as the liquidity level dropped significantly over the weekend.
Nevertheless, the crypto market had some positive news with the European Union’s Markets in Crypto-Assets (MiCA) legislation getting published in the Official Journal of the European Union (OJEU). Additionally, Hong Kong paved the way for Chinese liquidity into the crypto market.
Impact of the Debt Ceiling on the Crypto Market
The crypto market is expected to have heightened volatility this week amid uncertainty over the Fed’s interest rate scheduled on Wednesday. Moreover, President Joe Biden and House Speaker Kelvin McCarthy recently reached a bipartisan deal over the debt ceiling, which was unanimously agreed on by the Senate and Congress.
As a result, the United States Treasury Department is expected to sell nearly $700 billion worth of short-term loans, dubbed T-bills, to refill its Treasury General Account (TGA).
The effect of this move is expected to drain overall liquidity in digital assets, which are perceived as risky assets. According to a Coin Bureau analyst, the TGA refill will cause stress to show up in different areas of the crypto market. Precisely, the analyst noted in a recent YouTube video that the TGA refill will have a direct stress impact on the largest stablecoins including Tether USDT, DAI, and Circle USDC.
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