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Relevance: The upward trend started right after the House Republicans and the White House agreed upon an in-principle deal on suspending the debt ceiling. The agreement was announced by House Speaker Kevin McCarthy on Capitol Hill yesterday. If the Democrats and Republicans could not reach a debt ceiling deal, raising or suspending the limit, the U.S. would have run out of cash by June 1, defaulting on debt. President Joe Biden warned that the world would run into trouble if the country hit the debt ceiling. Details: Speaking at the final day of the G7 summit in Japan, Biden also said he would not support a bipartisan debt ceiling deal with Republicans that protects wealthy tax cheats and crypto traders. Meanwhile, the crypto community expected the debt default to be bad for the industry since many investors would want to avoid risky assets amid a recession. The crypto market entered into a downward trend amid the uncertainty around a potential debt default before seeing a recovery with the new agreement. The U.S. Congress must clear the deal for the debt ceiling to be legally suspended. What it means: The debt ceiling refers to the maximum amount of money the U.S. government is authorized to borrow as federal debt to meet its legal obligations, including the payments like military salaries, tax refunds, and Social Security and Medicare benefits. The debt limit is currently $31.4T, and the deal is expected to suspend this limit until January 2025, lifting the debt limit the government can incur. Brands that should care: The deal is also expected to avail the crypto mining firms operating in the U.S., including Marathon Digital, Riot Blockchain, and Hut 8 Mining, since it prevents a 30% tax the Biden administration planned to impose on electricity usage from all the digital asset mining. U.S. Congressman Warren Davidson recently confirmed on Twitter that one of the victories regarding the new debt ceiling deal would be blocking the proposed taxes. |
What the numbers say: Bitcoin (BTC) hit its nearly three-week high on May 28, reaching the $28,000 level for the first time since May 7. With this figure, the leading cryptocurrency saw a 4.52% increase from the previous day. Ether (ETH), the second-largest cryptocurrency by market cap, experienced a similar surge
on the same day. The popular cryptocurrency increased to $1,908 on May
28, reaching a three-week high with a 4.29% rise in value.