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Bitcoin Slides Below $27K as Investors Eye Debt Ceiling Negotiations
Treasury Secretary Janet Yellen warned the U.S. could breach its debt limit by June 1, potentially setting off a recession in the event of default.
By Jocelyn Yang
Updated May 17, 2023, 4:58 p.m. Published May 16, 2023, 9:21 p.m.
Bitcoin (BTC) continued its slightly downward consolidation on Tuesday, slipping just below $27,000 as investors kept close attention on the debt ceiling negotiations in Washington.
The largest cryptocurrency by market capitalization was recently trading at $26,950, down roughly 1.3% for the day, according to CoinDesk data. Over the past 24 hours, BTC’s price has been range-bound between $26,800-$27,400.
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While Treasury Secretary Janet Yellen warned that the U.S. is projected to breach the debt limit as early as June 1 and said a default “could lead to a recession,” several analysts believe a resolution to the debt ceiling issue could potentially buoy bitcoin.
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“The current macroeconomic situation is, in our view, conducive for increased crypto adoption,” Joe DiPasquale, CEO of crypto fund manager BitBull Capital, told CoinDesk in an email. “The debt ceiling getting raised also bodes well for risk assets as market participants seek to secure wealth,” he added.
Lucas Outumuro, head of research at blockchain analytics firm IntoTheBlock, told CoinDesk that there “could certainly be a bid for BTC” whether or not there’s a deal on the debt ceiling.
Outumuro sees the impact of these negotiations and the ongoing bank crisis as similar: “They both highlight the weaknesses of the system and create doubts about their long-term sustainability, thus creating demand for potential alternatives like crypto.”
Ether (ETH), the second-largest cryptocurrency by market capitalization, slid 0.2% on Tuesday to change hands around $1,820. Among other digital assets, LDO, the governance token for the liquid staking platform Lido, continued Monday's strength to rise an additional 3%. Layer 2 blockchain Polygon’s native MATIC token dropped by 2.8% to hover around $0.82 cents.
The CoinDesk Market Index (CMI), which measures overall crypto market performance, was down 1.1% for the day.
Equity markets closed lower on Tuesday, with the Dow Jones Industrial Average (DJIA) sliding 1%, the S&P 500 down 0.6% and tech-heavy Nasdaq off by 0.2%.
In bond markets, the 2-year Treasury yield rose 6 basis points to 4.08%, while the 10-year Treasury yield was up 3 basis points to 3.54%.
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
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Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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- Ethena's USDe becomes fifth stablecoin to surpass $10 billion market cap in just 609 days, while Tether's dominance continues to slip.
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