[Bitcoin Now] Bitcoin Rises 1.3% on News of Tentative Agreement in US Debt Ceiling Negotiations

With the US federal government debt default deadline just 9 days away, Bitcoin prices are on the rise following news that the White House and the Republican Party have reached a tentative agreement on raising the federal debt ceiling.

Image source=Reuters·Yonhap News

According to CoinMarketCap, a global cryptocurrency market tracking site, as of 11:53 AM on the 28th, Bitcoin was priced at $27,095 (approximately 35.98 million KRW), up 1.32% from the previous day.

Until around 9:30 AM that day, Bitcoin was trading in the $26,800 range, but prices began to climb after reports emerged that President Joe Biden and House Speaker Kevin McCarthy, a Republican, had reached a principled agreement on the debt ceiling issue.

Both sides reportedly agreed to limit government spending for two years as a condition for raising the debt ceiling. The Associated Press reported that specifically, spending would be frozen for the 2024 fiscal year, and a cap on budget increases would be imposed in 2025. CNN stated that the White House and Republicans plan to undergo internal approval procedures overnight for the tentative agreement. The Republican Party is scheduled to hold a conference call with its members. However, with many hardliners within both the Republican and Democratic parties, it remains uncertain whether internal negotiations will proceed smoothly.

Earlier, some market analysts argued that uncertainty surrounding the US federal government's debt ceiling increase was a bullish factor for Bitcoin. Cryptocurrencies can store value across borders and serve as a hedge against the current monetary policy system. Nevertheless, despite these claims, Bitcoin prices have risen following the news of the tentative agreement.

Investor sentiment in the cryptocurrency market remained neutral. According to Alternative, a cryptocurrency data provider, the Fear & Greed Index, which measures investor sentiment, rose by 2 points from the previous day to 50 points (neutral) on this day. Compared to 52 points a week ago, it fell by 2 points. Alternative’s Fear & Greed Index ranges from 0, indicating extreme fear and pessimism about investing, to 100, indicating strong optimism.