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$36T US Treasury debt ceiling signals Bitcoin correction as soon as Trump is in office

Source Cryptopolitan

The US treasury is expected to surpass its $36 trillion debt ceiling, a problem that President Trump may have to face on his first day in office. As a result, Bitcoin may experience a temporary correction to $70,000 before its next surge in the market cycle.

The crypto market is experiencing a surge fueled by Trump’s inauguration. It was expected.

Biden’s administration has seen debt numbers rise from $28 trillion to more than $36 trillion, growing by over $8 trillion in just three years. Just this year, the debt has increased by over $2 billion.

In a letter published on January 17, Treasury Secretary Janet Yellen declared a “debt issuance suspension period” will commence on January 21 and continue until March 14.

US Secretary Of The Treasury Janet L. Yellen Sends Letter To Congressional Leadership On The Debt Limit https://t.co/1GPjn1PHBx
— Mondo Visione (@ExchangeNews) January 18, 2025

This nearly two-month suspension of debt issuance could indicate a decrease in global liquidity. It also means a warning sign for Bitcoin price action. Bitcoin reached a new all-time high above $109,000 on Jan. 20, but it seems like this excitement will not be outlived.

Bitcoin and the American debt

During previous debt ceiling negotiations, Bitcoin showed inconsistent connections with standard market liquidity measurements.

This time, Alvin Kan, chief operating officer of Bitget Wallet, said that volatility in traditional markets may spill over into the crypto market. He stated, “It could lead to a broader market risk-off environment, potentially impacting Bitcoin negatively. The outcome would largely depend on investor behavior, economic policy responses, and global financial sentiment.”

While traditional markets are expected to limit liquidity, Marcin Kazmierczak, co-founder and chief operating officer of Redstone, believes the debt ceiling will have a mixed influence on Bitcoin prices. In fact, he suggested that investors may begin to perceive BTC as a protective measure against monetary instability.

Global liquidity is anticipated to increase following March 14. This will be a positive indicator of Bitcoin’s price trend throughout the remainder of 2025.

Things will be different tomorrow. pic.twitter.com/8Rmn1Jjgdr
— Michael Saylor⚡️ (@saylor) January 19, 2025

Meanwhile, the Bitcoin whale MicroStrategy is exploring another share expansion model to generate additional capital for further Bitcoin purchases. In fact, The company’s Bitcoin position has increased by a remarkable $19.055 billion as a result of the $28.179 billion spent and the methodical dollar-cost averaging into BTC. MicroStrategy’s BTC holdings are valued at $47.234 billion as of today.

Crypto to assist the American debt

According to the most recent reserve reports, Tether and Circle’s dollar-backed stablecoins contain over $95 billion in treasury notes.

Tether’s report indicates that the stablecoin issuer maintains $84.548 billion in government debt. Treasury bill holdings amount to $11.127 billion, according to Circle’s November 12 report, which was obtained from BlackRock.

The consistent demand for treasury bills could absorb American debt as stablecoins continue to develop. This could provide a fiat on-ramp to traders and encourage crypto adoption.

The rise of stablecoin issuers as buyers of treasury bills lessens the reliance on traditional buyers and eases worries that their holdings will drop due to global uncertainty. Stablecoins may serve as an alternative to stabilize the situation. This could hold until additional measures are implemented to alleviate the crisis.

A Step-By-Step System To Launching Your Web3 Career and Landing High-Paying Crypto Jobs in 90 Days.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

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Bitcoin briefly loses 2025 gains as crypto plunges over the weekend.Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant. The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year. Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus. Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses. Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.

Author Mitrade

4 hours ago

Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant. The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year. Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus. Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses. Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.

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