• Press Releases
    • Submit a press release
    • Read All
  • Contact us
Advertise
Bitcoinist.com
No Result
View All Result
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
    • Price
      • Bitcoin Price
      • Ethereum Price
      • Binance Coin Price
      • Litecoin Price
  • Industry
    • Industry News
    • Press Releases
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • How to do Crypto Gambling
      • Crypto Casinos
        • Ethereum Casinos
        • Solana Casinos
        • LiteCoin Casinos
        • DogeCoin Casinos
        • Live Crypto Casinos
        • New Casinos
        • Instant Withdrawal Casinos
        • Cash App Casinos
        • No KYC Casinos
        • VPN Casinos
        • Offshore Casinos
          • Crypto Casinos IT
          • Crypto Casinos ES
            • All Guides
          • Crypto Casinos JP
          • Crypto Casinos SG
          • Crypto Casinos MY
          • Crypto Casinos KR
          • No GAMSTOP Casinos in UK
          • No Cruks Casinos NL
      • Crypto Betting
        • No ID sportsbooks
    • Play Crypto Games
      • Crypto Poker
      • Crypto Slots
      • Crypto Blackjack
      • Crypto Crash Gambling
        • Aviator Sites
      • Plinko
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Events
  • Play Games
Breaking News: Ledger CTO Warns Of Crypto Clipper Malware Following Major NPM Breach
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
    • Price
      • Bitcoin Price
      • Ethereum Price
      • Binance Coin Price
      • Litecoin Price
  • Industry
    • Industry News
    • Press Releases
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • How to do Crypto Gambling
      • Crypto Casinos
        • Ethereum Casinos
        • Solana Casinos
        • LiteCoin Casinos
        • DogeCoin Casinos
        • Live Crypto Casinos
        • New Casinos
        • Instant Withdrawal Casinos
        • Cash App Casinos
        • No KYC Casinos
        • VPN Casinos
        • Offshore Casinos
          • Crypto Casinos IT
          • Crypto Casinos ES
            • All Guides
          • Crypto Casinos JP
          • Crypto Casinos SG
          • Crypto Casinos MY
          • Crypto Casinos KR
          • No GAMSTOP Casinos in UK
          • No Cruks Casinos NL
      • Crypto Betting
        • No ID sportsbooks
    • Play Crypto Games
      • Crypto Poker
      • Crypto Slots
      • Crypto Blackjack
      • Crypto Crash Gambling
        • Aviator Sites
      • Plinko
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Events
  • Play Games
Bitcoinist.com
No Result
View All Result
Breaking News: Ledger CTO Warns Of Crypto Clipper Malware Following Major NPM Breach
Bitcoin US debt ceiling

These Are The Implications For Bitcoin When The US Debt Ceiling Is Raised

Jake Simmons
by Jake Simmons
2 years ago
·
Posted in Bitcoin
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

The debt ceiling Doomsday is getting closer in the US and could have significant implications for Bitcoin. However, it remains to be seen when this will happen.

The US House of Representatives yesterday approved a bill to raise the debt ceiling. With a narrow majority, the Republican-dominated House of Representatives passed the proposal of its chairman, Kevin McCarthy.

The bill proposes raising the debt ceiling by $1.5 trillion, but only if there are also significant cuts in government spending. Largely because of this, the bill is not expected to have much of a chance in the Democrats-led Senate. Also, President Joe Biden has already signaled his intention to veto the bill.

However, urgency is needed. Doomsday could come as early as “a few weeks,” according to experts. The US Treasury could then no longer be able to pay its bills; a quick resolution is therefore required.

How Will The US Debt Ceiling Issue Affect Bitcoin?

For Bitcoin and the entire crypto market, the discussion about the debt ceiling is particularly interesting from the aspect of liquidity. As is well-known, Bitcoin is also referred to as a “liquidity sponge”. This means that BTC and crypto traditionally rise when there is loose monetary policy from central banks around the world, and fall when liquidity is removed from the financial system.

As macro analyst Ted (@tedtalksmacro) is preaching, global liquidity is a leading indicator of Bitcoin price. According to him, the BTC price rally and the recent surge in global liquidity went in tandem. During the banking crisis, the US Federal Reserve expanded its balance sheet with the Bank Term Funding Program (BTFP).

Related Reading: Bitcoin Soars Above $29,000 M2 Money Supply Drops To 90-Year Low

China’s reboot of the economy after the end of Zero-COVID was driven by means of loose monetary policy. And ultimately, the current debt ceiling crisis has also helped the Bitcoin price rise, as the US Treasury currently has to draw on its cash reserves.

However, in the coming months, this could change quickly due to the US debt ceiling, as Ted recently discussed. This is because US liquidity is made up of the Treasury General Account (TGA), the Fed’s balance sheet, and reverse repo injections.

Because of the debt ceiling, the US Treasury has had to tap the TGA in recent months. When the balance of the TGA falls, the Treasury is said to be adding liquidity. And the consequences have not been small, as Ted describes:

The Treasury has mitigated the negative liquidity impact of the Fed’s QT [Quantitative Tightening] efforts to date –> total liquidity injected via the TGA has outpaced the total liquidity withdrawn by QT. Since the commencement of QT:

QT (balance sheet) = -$644B in liq.
TGA reserves = +$780B in liq.

In other words, without the US Treasury, the Fed’s QT would have already hit markets much harder. “Instead, the TGA has supported a market conducive to higher risk assets (liquidity),” Ted added.

Related Reading: Dollar Index Loses Key Level: Bitcoin Cleared For Liftoff?

Raising the debt ceiling will mean that the U.S. Treasury will replenish its TGA reserves. This will be rather detrimental to Bitcoin and crypto as the Fed’s QT will no longer be mitigated now. Ted concludes:

If QT draws to a close before TGA reserves are built back up –> sideways/up.

If QT continues and debt ceiling raised –> down/sideways

Ultimately, QT takes a stronger grip on liquidity when the debt ceiling is raised and that points south, unless the Fed winds up QT….

Notably, liquidity from other central banks around the world is also playing a role and could soothe the impact, as Ted noted in a tweet today.

China are ramping up reverse repo liquidity injections again. pic.twitter.com/ytuHTwIREl

— ted (@tedtalksmacro) April 27, 2023

Digital Gold Narrative Grows

In the long run, the monetary policy will return to Quantitative Easing (QE) as the credit crunch leads to an economic crisis. Bitcoin and gold will benefit from this, with both assets already showing increased correlation in recent weeks, as Bitcoinist reported.

Renowned trader Peter Schiff commented on the debt ceiling:

Any deal to raise the #DebtCeiling isn’t good news. It means the U.S. will continue not paying its bills. So the debt will continue to grow and the Fed will continue to create inflation to pay for it. It’s bad news for the U.S. economy, dollar and bonds and good news for gold.

At press time, the BTC price stood at $28,972.

Bitcoin price
BTC price, 4-hour chart | Source: BTCUSD on TradingView.com
Featured image from iStock, chart from TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
ShareTweetShareShare

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

I consent to my submitted data being collected and stored.
Jake Simmons

Jake Simmons

Follow

Jake Simmons has been a Bitcoin enthusiast since 2016. Ever since he heard about Bitcoin, he has been studying the topic every day and trying to share his knowledge with others. His goal is to contribute to Bitcoin's financial revolution, which will replace the fiat money system. Besides BTC and crypto, Jake studied Business Informatics at a university. After graduation in 2017, he has been working in the blockchain and crypto sector. You can follow Jake on Twitter at @realJakeSimmons.

Full Profile

Related Posts

Metaplanet

Bitcoin Stash Grows: Metaplanet Now Holds 20,136 BTC After $15M Buy

7 hours ago
El Salvador

El Salvador’s Bitcoin Journey Hits 4-Year Mark, Results Still Divisive

11 hours ago
Bitcoin

Over 1 Million In Bitcoin Locked In Treasuries As Institutions Pour In $1 Billion

1 day ago
Bitcoin

$5 Billion Bitcoin Treasure Tied To Piracy Website Found In German Wallets

1 day ago
Bitcoin

Bitcoin Indicator Re-Enters Accumulation Zone After 147 Days – Details

1 day ago
Bitcoin

$6B In Bitcoin: Marathon Digital Treasury Now 2nd-Largest Among Public Firms

2 days ago

Premium Sponsors

Press Releases

  • miner

    From simply holding coins to earning steady daily returns...

    2 hours ago
  • Ex-Wealth Manager Théo Vaucher Leaves Wealth Management to...

    3 hours ago
  • miner

    COME Mining cloud mining is becoming a new way to play with...

    13 hours ago
  • How ALL4 Mining Cloud Mining Unleashes XRP’s...

    13 hours ago
  • Domain Scams

    Scam Coinomize Domains: How to Spot and Stop Domain Scams

    15 hours ago

Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

Bitcoin

  • News
  • Price
  • Businesses
  • Acceptance
  • Technology
  • Investment
  • Regulation
  • Reviews

Altcoins

  • News
  • Price
  • Ethereum
  • Ripple
  • Litecoin
  • EOS

Categories

  • Blockchain
  • Security
  • FinTech
  • Technology
  • Trending
  • Breaking News
  • Press Releases
  • How to

About Us

  • Advertise
  • Contact us
  • Editorial Policy
  • Privacy Policy
© 2025 Bitcoinist.com. All Rights Reserved.
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
    • Price
      • Bitcoin Price
      • Ethereum Price
      • Binance Coin Price
      • Litecoin Price
  • Industry
    • Industry News
    • Press Releases
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • How to do Crypto Gambling
      • Crypto Casinos
      • Crypto Betting
    • Play Crypto Games
      • Crypto Poker
      • Crypto Slots
      • Crypto Blackjack
      • Crypto Crash Gambling
      • Plinko
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Events
  • Play Games
Advertise

© 2025 Bitcoinist. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.