Bitcoin jumps to more than two-week high on relief over US debt ceiling

BITCOIN climbed to the highest level in more than two weeks, amid a boost to investor sentiment from a deal on raising the US debt limit.

The largest digital token added as much 3.2 per cent on Monday (May 29) and was trading at US$28,182 as at 9.32 am Singapore time, oscillating around its 50-day moving average.

Smaller tokens, ranging from Ether to Binance Coin, also posted gains.

The debt-ceiling deal between President Joe Biden and House Speaker Kevin McCarthy has helped risk appetite in global markets. But the agreement still has to clear Congress quickly to avert a US default.

A recent jump in Treasury yields and bets on more US monetary tightening are other potential headwinds.

“This morning’s positive risk sentiment directly relates to the resolution of the debt-ceiling impasse,” said John Toro, head of trading at digital-asset exchange Independent Reserve.

“Front-end funding costs remain highly elevated relative to crypto returns, resulting in negative carry for long holders. This will continue to prove a headwind for risk assets and the crypto complex.”

Bitcoin is on a five-day streak of gains – its best stretch since March – alleviating a challenging quarter due to poor liquidity and a US crackdown.

Crypto markets have partially rebounded in 2023 from a rout last year that led to blow-ups such as the collapse of the FTX exchange. But they remain well off record highs, including Bitcoin’s all-time peak of almost US$69,000 in 2021.

SEE ALSO

Temasek cuts employee compensation after failed FTX investment

Hong Kong treads fine line on regulating retail crypto trade

Dubai watchdog warns on risks of crypto’s global regulatory gaps

“It is possible the sheer relief of a debt deal will bring traders back to the table and trigger the next big leg-up in the price of Bitcoin,” said Tommy Honan, head of market analysis at crypto exchange Swyftx.