On Wednesday, Bitcoin and most cryptocurrencies were hit hard, and the same could be said for stocks as the Dow Jones and Nasdaq both retreated. Interestingly, several altcoins like ARPA, CREAM, IRIS, and Waves soared.
The reason for this slump is the ongoing debt ceiling issue, which has not been resolved yet. Democrats and Republicans have failed to agree on how to handle the crisis and, with the June 1 deadline fast approaching, they may not reach an agreement. This would be a major blow to the world since the US government holds more than $31 trillion in debt and a default would lead to a crash of key assets like stocks and bonds as well as a sharp rise in unemployment.
The debt crisis has prompted many to allocate their money to safe havens like gold and Bitcoin. However, during times of elevated risk, these assets usually drop. For example, both Bitcoin and gold experienced a sharp decline in March 2020 as the world went into lockdown.
Not all cryptocurrencies are falling, however. ARPA price has surged by more than 74% in the past 24 hours, driven by social media buzz. CREAM, Bella, PIVX, and IRIS have all experienced significant price increases, although the low-volume environment suggests that this could be a pump and dump.
Waves, meanwhile, has been removed from a cautionary list by a South Korean association of exchanges, leading to a surge in its price. Additionally, the platform has partnered with Pyth Network, an oracle platform that competes with Chainlink.