To avoid a new “shutdown”, the American Congress has decided to raise the $1.5 trillion ceiling on US debt, currently set at $31.4 trillion. And at the same time, the government must tighten its belt to cut $4.5 trillion in federal spending. Probably, this bill will not pass the Senate or the White House. During this time, bitcoin happily continues on its merry way.
Bitcoin, Fed and US Debt
Bitcoin is still far from crossing the $40,000 mark. For the moment, it is making successions of climbs and descents between 29,000 and 31,000 dollars. Some experts expect a new ATH this year or next year at the latest. THE next halfwhich will take place in April or May 2024, is sure topositively impact the price of the flagship crypto.
For Jesse Meyers, CEO of Onramp, the current situation in the United States will certainly impact the price of bitcoin.
” When the debt ceiling is lifted and the credit crunch leads to an economic crisis…
They will have to print money massively.
Bitcoin has been the big winner from the latest wave of stimulus. »
Cointelegraph, who echoed Meyers’ tweet, argued that dollar liquidity is the starting point for this analysis. In its lines, it was said that the raising of the American debt ceiling would only result in a print extra dollars. This will only stimulate the inflow of capital into assets like BTC, even if the latter seems risky.
Towards a deflationary recession in the United States?
$31.4 trillion is the maximum amount the United States can borrow to pay its bills. If the Senate and Joe Biden decide to raise the debt, as Republicans in the House of Representatives want, the country should expect more capital generated.
However, the FED decided on a “quantitative tightening” obliging it to no longer buy bonds. And it is very likely that the flow of available money will collapse and that buyers will refuse to buy government debt.
In such situations, Jerome Powell and his team will have no choice butquantitative easing policy.
Note, however, thata “shutdown” will negatively impact the dollar. And with the massive dedollarization operations perpetrated by the BRICS and countries seduced by multipolarity, bitcoin is chomping at the bit.
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