Published: April 21, 2023 at 6:13 p.m. ET
Uncertainty over whether the US will raise its debt ceiling before it is reached in the coming months has started to shake some financial markets like it did in 2011, but could make a positive case for Bitcoin, according to analysts at crypto investment firm NYDIG.
The deadline for raising the US debt ceiling, or the amount of money the US government can borrow, is approaching faster than expected, according to analysts at Goldman Sachs. According to analysts, it could arrive as early as June.
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Uncertainty over whether the US will raise its debt ceiling before it is reached in the coming months has started to shake some financial markets like it did in 2011, but could make a positive case for Bitcoin, according to analysts at crypto investment firm NYDIG.
The deadline for raising the US debt ceiling, or the amount of money the US government can borrow, is approaching faster than expected, according to analysts at Goldman Sachs. According to analysts, it could arrive as early as June.
Concerns about the upcoming deadline sweep the Treasury bill market, sending Friday’s 1-month Treasury bill yield to its lowest close since October.
Read: BofA postpones estimate of debt ceiling deadline as Treasury market reflects concerns about US borrowing limit
Also read: Here’s how concerns about the US debt ceiling may be affecting the markets
However, bitcoin
BTCUSD
could find its opportunity to shine during this uncertainty, analysts at NYDIG wrote in a note on Friday.
According to NYDIG analysts, Bitcoin can be considered “a valid investment option for those looking to isolate themselves from the machinations of politicians and monetary policymakers.”
Proponents of crypto have long touted it as a non-sovereign store of value and a hedge against existing monetary systems.
Certainly, the price of crypto is still very volatile and the digital asset market remains largely unregulated.
Bitcoin is trading at around $27,360 on Friday, which is down about 3% over the past 24 hours, according to CoinDesk data, but it has recovered nearly 70% so far this year but is still 60% below its all-time high in November 2021.
2011 was the last time the US experienced a debt ceiling crisis, the CBOE Volatility Index
IX
,
often known as Wall Street’s “fear gauge,” rising from around 20 to nearly 50 and the S&P 500
SPX
fell 12% to 1,100.
At the time, Bitcoin, created in 2009, was “in its infancy,” NYDIG analysts noted, but now with a market cap of over $550 billion, Bitcoin could see a different story, analysts said.
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