This week, the two parties in the U.S. Congress will continue to negotiate on raising the debt ceiling. Last year, U.S. debt accumulation reached 31 trillion U.S. dollars and is about to hit the ceiling of 31.4 trillion U.S. dollars. The U.S. federal debt ceiling is expected to expire at the earliest in early June. The debt ceiling will be hit at the end of August. If the debt ceiling cannot be raised before then, the U.S. government will be unable to pay bond interest and constitute a technical bond default. Therefore, the debt ceiling negotiation has become a subject of political wrestling in the United States and U.S. stock market fluctuations, and may now also affect to the cryptocurrency market.
Although the U.S. government will definitely raise the debt limit every time. After all, debts under the dollar standard can be solved by printing money, but it also involves the struggle of interests of various parties. U.S. Treasury Secretary Yellen has been saying every day recently that debt default will bring consequences to the United States. In the wake of the economic and financial disaster, we call on members of Congress from the opposition parties not to oppose raising the debt ceiling and to pass the debt ceiling as soon as possible to replenish the national treasury funds.
If there is a farce default on U.S. debt, first of all, credit rating agencies will still lower the U.S. debt credit rating in accordance with procedures. The price of U.S. debt may temporarily plummet. The Treasury Department will also suspend interest payments and government spending. In the end, debt negotiations will definitely be passed. A bunch of procedures will have to be run to restore government operations, which will incur additional costs and administrative time. Assuming that debt negotiations do not go smoothly, both U.S. stocks and cryptocurrencies are likely to fall. The latter is because stablecoin operators hold multiple positions at the same time. With fewer U.S. debt, market confidence will also be affected.
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