Cryptocurrency prices fell alongside global stocks early on Wednesday as US debt ceiling talks continued to drag on and fears of a possible default grip markets.
Bitcoin was down 1.86% to $26,713 per coin, while Ether was down 2.14%.
European stocks were also trading lower, with the Stoxx 600 Index trading up 1.66% at 7:13 a.m. EDT. Meanwhile, China’s benchmark CSI 300 ended the day down 1.38%.
While House Speaker Kevin McCarthy reported a “productive” meeting with President Biden on talks to raise the debt ceiling and avoid a default, it’s unclear to the market whether any progress has been made that brings the two sides closer to a deal. At the beginning of June, the US will face a possible default. a scenario that Treasury Secretary Janet Yellen described to lawmakers as “highly likely.”
As for crypto, bitcoin has held up better than most assets, according to trading firm QCP in a note published on Wednesday.
QCP added that the debt ceiling is “front and center of all the narratives” currently shaping the crypto markets.
“We believe the disconnect between BTC and other comparable markets is due to investors learning from the recent banking crisis that BTC is the best high-beta hedge against a ‘no deal’ scenario here,” the firm said. : .
“While our medium-term bias is towards higher BTC, in a transactional scenario, we believe BTC could quickly resynchronize with what other macro markets are implying.”
“However, in a ‘no deal’ scenario, we would easily post year-to-date highs,” he concluded.
© 2023 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.
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