Good morning. Here’s what’s happening:

Bitcoin prices: Bitcoin’s $26,8K debt ceiling holding pattern.

Insights Cryptocurrency as a hedge As currencies in emerging economies and two major countries struggle, citizens are turning to digital assets.

Bitcoins that are Boring Sleep Near $27K

Bitcoin held in its latest range comfortably on Monday, as investors assessed the latest developments regarding the U.S. Debt Ceiling Stalemate.

According to CoinDesk data, BTC has been hovering between $26,500 and $27,500 for almost two weeks. This is due to macroeconomic uncertainties including concerns that U.S. President Joe Biden and House leadership would not be able reach an agreement about raising the country’s debt limit. BTC has been hovering between $26,500 to $27,500, in line with CoinDesk’s data for nearly two weeks amid macroeconomic uncertainty, including fears that U.S. president Joe Biden and House leaders would not be able to agree on raising the debt limit of the country.

Edward Moya is a senior market analyst at foreign exchange market maker Oanda. He wrote a note that “Crypto Traders are not certain how Bitcoin will act throughout the next few days of debt ceiling negotiation.”

Moya said: While the risk of defaulting is small, if that were to occur, it could be felt as a blow to risk appetite and send cryptos crashing lower. Bitcoin seems content to trade at the lower limits of its recent range between $26,500-$30,000.”

Since 1960, government has raised the debt ceiling 78 times. However, the tense political climate has caused concern about lawmakers’ willingness to work together.

Janet Yellen, U.S. Treasury secretary, reiterated a warning from May 15 that, without an agreement, the Treasury Department “would not be able to meet all of the government’s commitments by early June and possibly as early as June 1.

Yellen said, “We learned from previous debt limit impasses: waiting until the very last minute to increase or suspend the debt limit could cause serious harm to consumer and business confidence, increase short-term borrowing rates for taxpayers and negatively impact the United States’ credit rating.” Treasury’s borrowing boats have increased substantially for securities due in June.

Ether recently traded at $1,820, an increase of 0.8%. Over the last two weeks, the second-largest crypto by market value was also stuck between $1,750 to $1,850. The other major cryptos, though in a paler shade, were also largely green. TRX and AVAX tokens, which are the smart contracts platform Tron’s and Avalanche’s, rose 3.8% and 2.3% respectively. The CoinDesk Market Index (a measure of the performance of crypto markets) rose by 0.4% recently.

The Nasdaq Composite, a tech-focused index, climbed by 0.5%, reaching a new 2023 high. Meanwhile, the S&P 500 (which has a significant technology component) and Dow Jones Industrial Average(DJIA), both of which have a crucial technology component, rose 0.2% and 0.4 %, respectively. Treasury yields increased, while gold’s price fell to $1,990. This is well below the near-record high it reached earlier this month, when investors were more inclined to seek out safe-haven assets.

In an interview on Monday with CoinDesk TV’s “First Mover” program, Ahmed Ismail said that investors were spooked by the withdrawal of market makers Jane Street, Jump Trading, and other crypto traders from the U.S. market, reducing the already diminishing supply of liquidity.

Ismail stated that “one of the biggest problems crypto faces is the massive fragmentation of liquidity. Events like this only exacerbates the problem.” We’re not seeing much activity right now because markets are inefficient and liquidity is fragmented. You will notice, I believe, that certain narratives are returning.

Ismail noticed an increase in the number of call options available on Bybit’s crypto exchange, which he interpreted as a sign of concern about macroeconomic uncertainty and concerns over the debt ceiling. “The narrative that people are taking out liquidity because they’re scared of what will happen and the uncertainty surrounding the debt ceiling is a major problem for keeping the crypto crisis so narrow right now.”

The Biggest Gainers

Biggest Losers

Crypto As Hedge

It’s important to examine the demand for cryptoassets and the outlook, given that the U.S. is stuck in political stagnation while other regions are building crypto frameworks. It is becoming more important as large countries face skyrocketing prices, unstable currencies, and autocratic controls over financial access.

The government of Pakistan was reportedly reported as having said last week that cryptocurrency “will never” be legalized in Pakistan in order to avoid penalties.

Noelle Acheson was the former head researcher at CoinDesk, and Genesis Trading. This article is an excerpt from her Crypto Is Macro Now Newsletter, which focuses primarily on the intersection between the changing crypto and macro landscapes. Her opinions are her own, and nothing that she writes should ever be construed as investment advice.

It may seem like an overreaction, but the FATF president’s letter “An End to the Lawless Crypto Space“, published last Thursday, urged crypto regulation instead of a complete ban.

Pakistan’s relationship with the FATF is strained, but was removed from “grey lists” just last October (which label certain countries for having “deficiencies in their AML control, which can lead to a limited participation in global financial markets).

The International Monetary Fund is also very visible. The International Monetary Fund is in talks regarding a bailout program for Pakistan, but the negotiations have stalled. Concern about Pakistan’s political issues and economic problems is now affecting neighboring countries. The IMF has been open in its disapproval of crypto markets. A few months ago reports emerged that the organization had imposed conditions on negotiations with Argentina.

Important events.

4:00 p.m. HKT/SGT(8:00 UTC) Hamburg Commercial Bank Composite PMI (May)

6 p.m. SGT/HKT(22:45 GMT) New Zealand retail sales (QoQ/Q1)

CoinDesk TV

If you haven’t seen it yet, here is the latest episode of “First Mover” on CoinDesk TV.

Glassnode data showed that Bitcoin (BTC) was settling in the tightest range it had seen for months, despite the looming concern about the stability and debt ceiling of the United States. FLUID CEO Ahmed Ismail provided his analysis of the crypto markets. Sandeep Nailwal, Polygon’s co-founder, also discussed the launch of a Web3 Fellowship program. Alan Austin, managing director of the Litecoin Foundation, also commented on the recent increase in Litecoin activities amid the frenzy around Ordinals.

Tether trading volume falls to multi-year lows, market cap rise is ‘questionable’, Kaiko USDT stablecoin trading has dropped to its lowest levels in four years while its market capitalization is nearing an all-time-high of $83 billion.

Namada Proposes Airdrop Ahead the launch of its mainnet, Namada is trying to sign a variety of tech and token partners.

U.S. Some say that the debt deal could weigh on bitcoin price. The Treasury’s attempts to rebuild cash balances following resolution of the situation with the debt limits may drain dollar liquidity out of system, pushing bitcoin down.

DEX Mangrove Launches On Polygon Testnet and Plans To Go Live On Mainnet In June Wintermute-backed Mangrove is planning a launch on the mainnet of its programmable Order Book DEX by early June.

Gemini claims Genesis parent DCG missed $630 million payment Gemini is working with Genesis and DCG to forbear from a default.

Sam Reynolds and James Rubin edited the book.