US Lawmakers Clinch Tentative Debt Deal as Bitcoin Bulls Swoon

Highlights

• The U.S. government has bided itself some time and averted a default on its debt for now.
• Now that the U.S. debt ceiling appears to be rising, bitcoin is looking more attractive.
• The bitcoin price is holding above the $27,100 level.

After a drawn-out battle, U.S. lawmakers reached a tentative deal on Saturday to raise the debt ceiling and avoid a default for the time being. While House Republicans and the White House were able to agree to hold the line on the U.S. debt ceiling for now, the clock is still ticking. The U.S. Treasury expects that its coffers will run dry by June 5.

Investors are relieved considering a default would have triggered a wave of chaos in the markets, including cryptocurrencies. Meanwhile, now that the U.S. debt ceiling is going higher, investors have even more reason to hold a hard asset like bitcoin.

Bitcoin and Gold

The debt ceiling crisis has shined a spotlight on store-of-value assets gold and bitcoin. As U.S. debt limit looks set to rise, and the Federal Reserve has no qualms about printing more money, hard assets like bitcoin and gold look increasingly attractive. The only ceiling that bitcoin faces is its supply, which is capped at 21 million coins.

Robert Kiyosaki, author of Rich Dad Poor Dad, called out U.S. politicians for even considering raising the debt limit by another $30 trillion, saying that it’s “bad comedy” and that the U.S. is bankrupt. He proceeded to advise investors to buy gold, silver and bitcoin.

Politicans debating raising $ 30 trillion US debt limit bad comedy, “kabuki theater.” Facts are: US bankrupt. Unfunded liabilities as Social Security are over $250 trillion. Financial market “derivative assets” measured in quadrillions…thousands of trillions. WTF. Buy G,S, BC.

— Robert Kiyosaki (@theRealKiyosaki) May 24, 2023

The bitcoin price has inched higher by about 2% to $27,128 in the past 24 hours and remains flat for the week. Traders are eyeing bitcoin $30,000 in the next upward move.

The rising bitcoin tide is buoying the broader market higher, with each of the top-10 cryptocurrencies trading in the green on the heels of the debt deal.

Meanwhile, gold could be setting a fresh record high in the near future. While gold slipped back below $2,000 per ounce as the likelihood of a debt deal increased, it continues to flirt with that level. It’s likely that gold will take another run at it soon.