Debt Ceiling Concerns Weigh on Crypto: U.S. Unemployment and GDP Data Unaffected

Debt Ceiling Concerns Weigh on Crypto: U.S. Unemployment and GDP Data Unaffected

Crypto investors remain focused on U.S. debt ceiling negotiations despite unexpectedly strong unemployment and GDP data, causing bitcoin to stay range-bound around $26,500 according to digital assets data provider Kaiko.

Unemployment and productivity data arrived stronger than predicted but investors seemed focused narrowly on the ongoing negotiations that will determine if the United States Government must default on its debts.

The United States announced unexpectedly strong unemployment and GDP data, but cryptocurrency investors had debt ceiling negotiations on their minds, Thursday.

They recently kept Bitcoin (BTC) lingering under $26,500, up about 0.3 percent but below its most up-to-date nearly two-week-long range betwixt this threshold and $27,500. The largest digital currency by market cap has lost some of its 2023 profits in recent weeks as investors wrestle with a combination of macroeconomic uncertainties, most prominently of late the U.S.’s ongoing debt limit stalemate that will determine whether the United States Government can pay its bills. On Thursday, Republican House lawmakers informed progress in discussions with the White house, but whether the sides can reach agreement in time to avert a Government default remains uncertain.

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“Debt ceiling concerns are definitely weighing on Bitcoin and cryptocurrency generally,” Riyad Carey, research analyst at digital assets data provider Kaiko, wrote via Twitter to CoinDesk. “We’ve been fairly range-bound in the recent weeks as there have not been numerous crypto-specific catalysts.

Carey does not expect any dramatic price shift in bitcoin’s price in the near future, if not beyond with the following major catalyst, the Bitcoin halving, almost a year away. “ Of course, regulatory developments could shake this up,” he wrote.

Ether was recently changing hands at just over $1,812 up approximately 0.3 percent from Wednesday, same time. Most other major cryptocurrencies assumed faint shades of green with MATIC, the crypto token of layer 2 platform Polygon, recently growing 2%. The CoinDesk Market Index, a measure of cryptocurrency markets performance, was up 0.46%.

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Tech stocks seemed to levitate after chipmaker Nvidia stated sales would boost as a result of the expansion of artificial intelligence protocols. The tech-heavy Nasdaq Composite and S&P 500, which has a hefty technology component climbed 1.7 percent and 0.9%, respectively. Safe haven investment gold continued itsrecent decline less than a 30 days after reaching a near record high, sliding greater than a percentage point to trade at $1,959.

On the other hand, assets of all stripes seemed largely unmoved by Thursday’s jobs data, which showed 229,000 Americans filing unemployment advantages past week, well below the anticipated 245,000, and the United States economy expanding 1.3%, the third consecutive quarter of growth. Earlier this year and throughout 2022, such news can potentially have sent digital assets cascading, but CoinDesk analyst on Thursday highlighted a shift in the good-economic-news-leads-to-lower-crypto- prices narrative.

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Still, the debt limit negotiations remained at the center of numerous market observers’ radars. “Everything hinges on the debt ceiling at this time, and until a resolution of some sort is found, I do not expect to see Bitcoin (BTC) outperform as it has since the start of the year,” Brent Xu, CEO and co- founder of Umee, a Web 3.0 bond-market platform, wrote to CoinDesk. “If the crisis gets prolonged, it seems like Bitcoin and other digital assets can potentially linger or even push downward for a good while.”

Xu wrote that Bitcoin (BTC) and other digital assets remain  in a  “ cryptocurrency Spring phase, so the present sideways volatility, punctuated by pullbacks after short runs, is to be expected,  that this tendency will continue until next year when the halving kicks in. And once that happens, we’re likely off to the races.

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He went on to say: “For now, with so much macro and political uncertainty, I think investors and traders are being cautious with their capital.”

James Rubin.


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