US raises national debt ceiling by $ 2.5 trillion, delay until 2023

The United States Congress US did authorize $ 2.5 trillion increase in national debt limit – crypto experts weigh how that could affect Bitcoin.

The US government almost postponed bankruptcy for at least a year after Congress finally agreed to raise the debt ceiling to $ 2.5 trillion.

With a debt ceiling likely to rise above $ 30 trillion and mounting mass pressures from US dollars that has already fueled inflation, the question arises – what about Bitcoin?

US debt ceiling rises again

The US House of Representatives approved the previous debt ceiling hike in October 2021 with a “more modest” increase of $ 480 billion, raising the borrowing limit to $ 28.9 trillion. Although Republicans initially tried to oppose the adoption of the Democratic bill to increase social and climate spending, the bill was quickly signed and enacted by President Joe Biden.

At this point, increasing the cap is not in the country’s long-term interest as the next hearing is due to take place in December. In December the scenario repeats itself to some extent, but the Democrats prevail.

At a ratio of 221: 209, the bill was passed by Congress and is currently in the hands of President Biden, who is expected to sign it soon. If he signs it, the bill would raise the federal government’s debt ceiling by $ 2.5 trillion to $ 31.4 trillion. Even more important for the world’s strongest economy, however, is that the risk of national bankruptcy is delayed at least until early 2023.

California spokeswoman Nancy Pelosi praised the adoption of the bill, saying: “The full faith and credit of the United States has never been challenged. The health of our economy is never at stake. ”

In contrast, Republican MP Jodey Arrington was disappointed with the end result, noting that the country’s debt level was at its highest level since World War II and “we are not going to war now.”

Has the time of bitcoin come?

With the United States printing so much money and consistently raising its debt ceiling over the past two years, the consequences are much more obvious. The US inflation rate, which has already risen by 3.24%, has now risen significantly more sharply in the past six months.

This led to an inflation rate of 6.8% in November – the highest level in around 40 years. Even the people behind some of the key decisions – Fed Chairman Jerome Powell, and Treasury Secretary Janet Yellen – no longer see rapidly rising inflation as “temporary”.

While Bitcoin has a pre-programmed inflation rate that actually drops every four years. It has no central authority behind deciding whether the number of newly created bitcoins should almost double in a few years, similar to the dollar. It has a limited supply that even with the President’s signature cannot be increased.

As expected, all of these features attract well-known investors outside of the crypto industry. People like Paul Tudor Jones III, Stan Druckermiller, Thoma Bravo, Anthony Scaramucci and others began to put money into BTC and regularly touted it as an investment vehicle against rising inflation.

With a new $ 2.5 trillion hike in the debt ceiling just waiting for Biden’s signature, several crypto experts have given their opinion on the potential impact on BTC.

Prominent BTC advocate Max Keizer said the bill created “perfect conditions for Bitcoin” when the US government surrendered to “the ferocious and voracious beast of hyperinflation.”

“I hate to see America fall, but I don’t have a lot of dollars so I don’t care.”

Scott Melker, better known as the wolf of the streets, pointed out that Bitcoin is an asset that does not carry “the risks inherent in a long-term savvy investor.”

“Short term news like the debt ceiling hike is without a doubt a flash of light on the Bitcoin radar. Everyone knows that the government will continue to print money and raise the debt ceiling if necessary, this is largely priced into the meaning and use case of Bitcoin – as a hedge against this nonsense ”.

Gemini co-founder and an early adopter of BTC, Tyler Winklevoss, believes the Senate approval will actually serve as a “$ 2.5 trillion advertisement for Bitcoin.” Michael Saylor shares a similar view, saying, “It looks like Bitcoin has government support.”

Bitcoin price is up over 2% at press time and is trading above the $ 49,000 mark.

Source: TradingView

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