Bitcoin surged to a more than two-week high, rising by up to 3.2% on Monday and trading at around $28,182, thanks to investors boosted by a decision to raise the US debt limit.
This is the fifth day in a row that the digital currency has recorded gains, thanks to a resolution of the US debt-ceiling impasse which helped global risk appetite.
However, the agreement must still be passed quickly by Congress to avoid a US default, in addition to other potential headwinds such as a recent surge in Treasury yields and US monetary tightening.
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% on Monday and was trading at $28,182 as of 9:32 a.m. in Singapore, 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.”
Crypto markets have partially rebounded in 2023 from a rout last year that led to blowups such as the collapse of the FTX exchange. But they remain well off record highs, including Bitcoin’s all-time peak of almost $69,000 in 2021.