Digital currency prices were trading lower early Wednesday morning alongside worldwide equities as debt ceiling negotiations in the United States continue to drag on and fears of a possible default grip markets.
The price of Bitcoin (BTC) was trading down 1.86 percent at $26,713 per coin, while ether was trading down 2.14%.
European stocks were likewise trading lower, with the Stoxx 600 Index trading down 1.66 percent at 7:13 am EDT. In the meantime, China’s benchmark CSI 300 Index ended the day down 1.38%.Source: Tradingview
Although while House Speaker Kevin McCarthy informed a “productive” meeting with President Biden on negotiations to raise the debt ceiling and avoid default, it’s not clear to the market if any progress has been made that brings the two sides closer to finalizing a deal. The United States faces possible default in early June — a scenario that Treasury Secretary Janet Yellen stated to lawmakers has “highly likely.”
As for cryptocurrency, Bitcoin (BTC) has held up better than most assets, as noted by trading company QCP in a note released Wednesday.
QCP also mentioned that the debt ceiling is “front and centre of all narratives” as of now shaping cryptocurrency markets.
“We believe that the disconnect betwixt Bitcoin holding up vs. other comparable markets, is owing to investors having learnt from the past few banking crisis that Bitcoin is the best high-beta hedge against a ‘no-deal’ scenario here,” the company said.
” Despite the fact that our medium-term bias is for higher BTC, on a deal scenario — we think Bitcoin could quickly sync back with what other macro markets are implying.”
“On a ‘no-deal’ scenario on the other hand, we will easily take out the year’s highs,” it concluded.