"Oh, this can't be, will the price of BTC fall?"
The cryptocurrency market can be affected when the tightening of liquidity (liquidity) continues right after the United States (US) debt ceiling is raised which will remove hundreds of billions of dollars from the financial system.
In fact, the crypto market could see a decline after US lawmakers allowed the government to issue new debt, which would put pressure on risky investments.
It is well known that the US Treasury needs to replenish the Treasury General Account (TGA) which means it will add as much as $500 billion from the financial system.
That streak, risky assets can be affected as they are more sensitive to liquidity conditions than bonds and equities, commented macro analyst Noelle Acheson, adding that the treasury that issues an account at the Federal Reserve (Fed) will be a hindrance to the growth of the crypto market.
It is already known that the filling of all general accounts is in line with the approach of the Fed which intends to tighten its monetary policy, but was briefly interrupted in March due to the banking crisis.
According to Tom Dunleavy, the founder of Dunleavy Investment Research, the approved debt ceiling settlement could have a negative impact on liquidity as the agreement will restrict non-defense funding, withdraw all unspent pandemic aid funds and others.
As of this writing, the entire crypto market saw a slight decline as the price of Bitcoin (BTC) plunged by 2.24% to $27,160 in the past 24 hours with a market cap of $526 billion.
