The U.S. Debt Ceiling Dilemma: How It's Affecting the Markets

Global markets have experienced mixed reactions over the past week, likely fueled by the uncertainty surrounding the resolution of the US government's  $31.4 trillion debt ceiling dilemma.  

As we highlighted in our previous week's newsletter, the US Treasury is confronting the imminent threat of a debt crisis, which could result in an inability to fulfill its financial obligations as early as June.

Fortunately, it appears the legislators are now inclined to reach a consensus.

While this news, coupled with a decelerating rate of inflation, has instilled some optimism in the market, certain analysts caution that the possibility of a mild recession still looms.

At this stage, the market sentiment is starting to feel indifferent, and all the communities I am participating in, where I discuss with other traders, currently have drastically low activity.

What this is a sign of, I will let you be the judge of, but to me, it feels like the quiet before a volatile move.

Despite the low activity in the market, recent data from Glassnode reveals that the number of Bitcoin addresses holding 1 BTC or more has now surpassed 1 million, a significant milestone for this pioneer crypto asset.

The spike in number of “wholecoiners” is occurring at a time when the crypto market has plummeted by over 65% from its all-time high.

A great indicator that there is still long-term conviction to be found in the markets even if there is blood in the streets. 

We recently published an extensive piece delving into this emerging crypto asset class and its potential to bridge traditional assets with on-chain economies.

RWAs offer a unique and compelling value proposition through asset tokenization. For more insights, here is the link to the full article.

Tether, the stablecoin issuer, has announced a new investment strategy focused on Bitcoin (BTC). Starting this month, Tether will regularly purchase BTC using a portion of its profits, allocating up to 15% of realized investment profits.

This move follows Tether's recent disclosure of holding $1.5 billion worth of BTC and $3.4 billion of gold among its reserve assets, backing its flagship stablecoin USDT and other stablecoins.

Bakkt, the digital asset firm owned by Intercontinental Exchange, has recently removed 25 out of the 36 crypto tokens that were originally listed on its recently acquired trading platform, Apex Crypto.

According to a spokesperson for Bakkt, the decision was made as part of their routine coin listing review process.

Notably, the majority of the delisted tokens are associated with prominent decentralized finance (DeFi) and non-fungible token (NFT) ecosystems, including AAVE, Uniswap (UNI), Compound (COMP), and LINK.

Sky Mavis, the creator of the widely acclaimed blockchain-based video game Axie Infinity, has recently made an exciting announcement. The game is now officially accessible for download on the Apple App Store.

Users in various countries, such as Argentina, Peru, Colombia, Venezuela, Mexico, Indonesia, Vietnam, and Malaysia, will be able to enjoy this captivating gaming experience on their Apple devices.