Debt Ceiling Drama: Potential Impact on Bitcoin and Forex Markets

Analysts warn that a potential deal to raise the US government's $31.4tn debt limit may bring pain to the crypto market. Once the debt limit is raised, the Treasury will look to build back its cash balance by issuing government bonds, which may suck out liquidity from the system and put upward pressure on bond yields. Bitcoin is known to move in the opposite direction of bond yields, so a potential deal might eliminate major economic uncertainty, but assets like bitcoin that are heavily dependent on fiat liquidity could suffer.