Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues here or sign up here to receive future newsletters.
Good news everybody,
As of Thursday morning, no one has been bankrupted or sued by the US Securities and Exchange Commission (SEC) this week. I’m hoping this isn’t the quiet before the storm.
For one, we’re now just 13 days away from a possible default on US debt. Ratings agency Moody’s has put a number to the probability of a default: 10%.
The ramifications from a default are hard to predict, but it will likely lead to one of the scariest financial crises since the 2008 recession.
The crypto sector is already bracing for impact. USD Coin issuer Circle has reportedly balanced its reserves to include only treasuries that mature no later than May 31.
A Bloomberg investor survey showed that Bitcoin, together with gold and US treasuries, are likely to gain traction as safe-haven assets should the default come to pass.
Yet Bitcoin market behavior hasn’t quite reflected that. The coin began to tank on May 10, when White House negotiations to raise the debt ceiling went nowhere.
The token bottomed out on May 13 and has since then inched up just 3% – which really just means that the Bitcoin market still isn’t quite sure how to price in the impact of a debt default.
Or, it might have been reacting to regulatory news (more below).
Let’s get to this week’s story before the default happens.
— Scott
👀 ALL EYES ON…
What everyone’s talking about.
Image credit: Timmy Loen
⭐ TO THE STARS
MORE TO CHEW ON
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