Last Week in Review: Bitcoin rallies as the US suspends debt ceiling
The highlights from last week’s headline grabbers. All the important news, numbers and events from the world of crypto in one place.
News from the block
🦅 Bitcoin rallies on news that the US will be able to pay its bills
- Republicans and Democrats finally came to an agreement over a deal that will suspend the current US debt ceiling and avoid the country defaulting on its debt payments. Had the deal not been finalised, there was a real possibility the country could have missed interest payments on debts or not have been able to repay its loans when the amount was due.
- News about a possible, unprecedented debt default by the US has been the talk of markets and media for the last few weeks.
- Crypto and US stock markets rose on the news. Bitcoin rallied by 5% before settling just under $28K on Monday.
👑 Bank of England not ready for a CBDC
- The Fed, Bank of Japan, European Central Bank, and the Bank of England (BoE) were among a group of regulators who contributed to the latest paper on central bank digital currencies (CBDCs).
- The paper highlights how countries are in varying stages of CBDC development. “Some of the members of this group are approaching a point where they may decide on whether or not to move to the next stage of their CBDC work,” the authors noted.
- “Jurisdictions issuing CBDC will likely want to enable cross-border payments between them,” the paper said.
- The BoE said in February it wasn’t ready to commit the resources necessary to develop a working CBDC, Blockworks reported.
🍕 Bitcoin Pizza Day, what’s the big deal?
- We covered this already, but seeing that Bitcoin Pizza Day was celebrated last week and this newsletter covers events from last week, it’s as good a reason as any to look back on Bitcoin’s evolution through the years.
- Why all the fuss about someone buying pizzas with crypto more than 10 years ago? There continues to be a lot of arguing about BTC’s underlying value and how to measure it. Bitcoin became money when Laszlo Hanyecz used it as currency and bought Papa John’s pizzas.
- Laszlo being able to buy food with BTC was the first proof of its worth as a unit of transaction, and not just a digital anomaly traded online.
- Scroll through our illustrated story on the events that blipped bright on Bitcoin’s history. Yes, the guy who bought two pizzas for 10,000 BTC also features.
⛳ Crypto-friendly regulation in France lures crypto firms
- Thanks to its crypto-friendly regulation, as many as 100 companies could be lining up to register as crypto services providers in France, reports CoinDesk.
- “In France, we are proud to be pioneers” with the crypto service asset provider regime, known as PSAN, that was legislated in 2019, Benoît de Juvigny, Secretary General of the Autorité des marchés financiers (AMF), told reporters. “If American players want to benefit, in the very short term, from the French regime, and from the start of 2025 from European arrangements, clearly they are welcome,” he added.
- In sharp contrast to the uncertain regulatory environment in the US, EU lawmakers signed off on its groundbreaking crypto regulation earlier in May.
- The Markets in Crypto Assets (MiCA) regulation will come into force beginning 2025.
What is a CBDC and why are governments interested? Find out HERE.
Crunching the numbers
📈 $31.4 trillion – The US debt ceiling before being suspended by US lawmakers. The debt ceiling limits how much money the US can borrow to pay its bills, usually by issuing bonds.
🏦 14 years – The South African Reserve Bank raised interest rates last week to 8.25%, a 14-year high.
😶🌫️6.8% – The current inflation rate in South Africa.
🇺🇲 4.93% – Inflation in the US.
🪂 $1.28 trillion – Bitcoin’s all-time high market cap in November 2021.
💾 $950 billion – Computer-chip maker Nvidia’s market cap, up from $200 billion as the stock jumped on news of demand for the company’s AI chips as the AI gold rush continues.
The crypto time capsule
10 years ago, this week
An economist answers questions about inflation
The South African Reserve Bank (SARB) again raised interest rates last week, shortly after another rate hike by the Federal Reserve Bank in the US. What does this have to do with crypto and other investments? An economist answers our most pressing questions about inflation, interest rate hikes and how markets react, HERE.