There has been a happy ending recently regarding the US debt ceiling, which is perhaps one of the most talked-about topics of the last period. Owners of risky assets such as cryptocurrencies are likely to face a new challenge this time, as markets overtake months of drama around the US debt ceiling.
Citigroup has warned that Bitcoin faces new challenges after the debt settlement progresses. Citi analyzed the performance of risky assets during declines and found that they were vulnerable to higher volatility and weaker returns. Citi Research stated that Bitcoin and Ethereum could be negatively affected due to the next economic moves of the USA.
Based on this prediction, strategists stated that the crypto market is not immune to US debt default and printing US dollars against negative developments. As a result, Citi Research said that the risk of US government default is not a positive signal for decentralized digital assets. On the other hand, Citi Index senior market analyst Fiona Cincotta suggested that the factor that could pave the way for the rise in Bitcoin would be the Fed’s dove policy. Citigroup thinks that Bitcoin is well fed by the banking problem in the US, however, the now anticipated scenario is new to crypto.