• Bitcoin’s reaction to debt ceiling negotiations is being studied historically.
• USDT and USDC have been growing in tandem since 2018, but USDC suffered a sudden drop in May 2022.
• Tether announced it will regularly allocate up to 15% of its net realized operating profits for buying Bitcoin.
Bitcoin’s Reaction to Debt Ceiling Negotiations
A historical look at Bitcoin’s reaction to debt ceiling negotiations has been conducted to better understand the factors that influence its price movements. The average Federal Funds Rate from 1955 to 2023 is 4.62%. Asia trading hours are dominating the supply of Bitcoin, making it an interesting asset for investors looking for global exposure or diversification options.
USDT vs USDC
USDT and USDC have been growing together since debuting in 2018 but recently there has been a noticeable divergence between them. In May 2022, USDC took a tumble and plummeted down to roughly $50 billion in circulating supply while USDT was at an all-time high of $83 billion with rumors of flipping USDT soon after the collapse of UST. Since then, USDC has lost approximately $13 billion in circulating supply due largely to de-pegging on March 11th. However, USDT is now only about $1 billion away from reclaiming a new all-time high in circulating supply.
The stablecoin wars have come into focus as the difference between USDT and USDC signifies which one could be the potential winner over time. As more and more investors seek out low-risk investment opportunities like stablecoins, this competition could become even more intense as developers look for ways to make their tokens stand out from the crowd such as lower fees or faster transaction speeds.
Fed’s MBS Dilemma
The Fed’s Mortgage Backed Securities (MBS) dilemma should also be noted when considering investing in Bitcoin as rising rates could trigger massive portfolio losses if not managed carefully by investors who rely heavily on these bonds for income streams or capital preservation strategies. Even though MBS prices have held up relatively well during times of market stress so far, any significant changes could lead to major losses that would significantly impact portfolios across all asset classes including cryptocurrencies like Bitcoin, Etherium, etc..
Tether Allocating Funds Towards Buying Bitcoin
News just emerged that Tether would regularly allocate up to 15% of its net realized operating profits towards purchasing Bitcoin with no indication yet on what percentage might actually be purchased each quarter or month going forward but given current market conditions it seems likely that those allocations will increase over time as demand continues increasing along with other crypto currencies like Ethereum and Ripple which may also benefit from Tether’s purchases depending upon their respective performance relative to BTC moving forward