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Bitcoin has surged to a two-week high on the back of a potential deal struck by Republicans and Democrats to avoid a US debt ceiling default. 

Having traded below or around $27,000 for the past two weeks, bitcoin surged early this week to close to $28,000 as investors bought the news of a potential deal to avoid default disaster. The cryptoasset is still below recent levels however as markets continue to tread carefully. It is currently trading at around $27,500 on eToro. 

Ether similarly saw a price surge, having traded around $1,800 for three weeks it rose to just shy of $1,900. It is currently trading at around $1,880 on the eToro platform. 

Whether either asset or the wider market begins to see some significant momentum remains to be seen. The debt ceiling issue has certainly been leaving markets uncertain for several weeks now, but there are still big questions in play around wider macroeconomic developments around interest rates and inflation. 
 

US debt ceiling deal crypto mining hope

Alongside the broader good news potential for a US debt ceiling deal came a footnote that might give some encouragement to the crypto sector in the country. Although unconfirmed, it would appear the deal has put paid to plans to impose stringent taxes on crypto mining.

The plans were set to ratchet up a 30% levy on crypto mining over three years, putting the financial viability of many operations in doubt. But the debt deal it would appear has left this policy on the cutting room floor.

This could potentially give miners in the US much-needed relief from increasing political pressure and could unlock investment that was holding its breath. The crypto mining sector has been through as much volatility as the rest of crypto in the past year as regulatory threats loom and earnings plunge. 
 

Bitcoin ordinals pass 10 million

Ordinals, the biggest phenomenon on the Bitcoin blockchain in 2023, has passed 10 million inscriptions. The protocol, which allows information to be recorded on the Bitcoin network through the creation of new tokens, has exploded this year. 

The feature has thrown up significant debate thanks to transactions flooding the network, hiking fees, and slowing down transaction times. The congestion became particularly heavy when the BRC-20 token standard launched in early March, which allowed users to create entirely new tokens based on the Bitcoin blockchain. 

While down from its activity peak in early May, the process has underlined that innovation is still possible on the world’s largest blockchain and cryptoasset. Resolutions and new initiatives have popped up to cure some of the issues, a testament to the dynamism and ingenuity of many developers and market participants in the blockchain. 
 

Could China spell the end of crypto winter?

Reports are widely emerging that China’s frosty relationship with crypto could be about to thaw. The implications of a potential policy shift from the major Asian power could be profound for the crypto market if a loosening of control is on the cards

This is however a big ‘if’ - we have no real confirmation of the Chinese Government’s policy thinking on crypto. However, we do now have some insight into Web3 thinking as it has just published a white paper. The white paper recognizes the relevance of Web3 as a future trend, but there is still much left to be guessed at in terms of crypto markets. 

China has had a mixed history with cryptoassets, imposing various bans over the past decade. But a liberalization of ownership could have fundamental market-moving consequences for major cryptoassets such as bitcoin and ether were it come to pass. 

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