Daily News | Concerns over Debt Ceiling Talks and China's Economic Slowdown Impact Bitcoin; UK Gambling Regulation, and Ledger Backlash

2023-05-17, 02:02

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## Crypto Daily Digest: Bitcoin Slips Amidst Debt Ceiling Talks, UK Lawmakers Propose Gambling Regulation for Cryptocurrencies, Ledger Receives Backlash for 'Ledger Recover' Feature

<a href="/pt/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> (BTC) experienced a slight decline on Tuesday, with its price reaching around $27,035, down 0.48% for the day. However, it remained range-bound between $26,850 and $27,300 over the past 24 hours. Investors closely monitored the debt ceiling negotiations in Washington, speculating that a resolution to the issue could potentially benefit <a href="/pt/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>. Meanwhile, the overall crypto market cap saw a minor dip of 0.04%, while Ether (ETH), the second-largest cryptocurrency, recorded a modest increase of 0.44% and was trading at approximately $1,825.

In a significant legal development, a federal judge ruled that the U.S. Securities and Exchange Commission (SEC) cannot seal documents related to a 2018 speech on cryptocurrency and securities delivered by former official William Hinman. The judge deemed the documents, which include Hinman's statement expressing his view that ether is not a security, as relevant to the ongoing lawsuit against Ripple. While the SEC can redact personal information, the judge found that sealing the "Hinman Speech Documents" would not be justified. The judge did allow Ripple to redact certain documents but deemed proposed redactions related to <a href="/pt/price/xrp-xrp" target="_blank" class="blog_inner_link">XRP</a> as "overbroad."

The regulatory landscape surrounding cryptocurrencies continues to be a topic of discussion and debate. In the United Kingdom, a cross-party group of lawmakers has called for cryptocurrencies like <a href="/pt/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> and ether to be regulated as gambling rather than financial services. They express concerns that current proposals may create a false sense of security among investors. However, the country's finance ministry maintains that financial services regulation, with its proven track record, is better equipped to mitigate the risks associated with cryptocurrencies. The lawmakers urge the government to stay updated on potential innovations arising from the underlying technology.

Amidst the regulatory discussions, Paris-based crypto hardware wallet provider Ledger has faced criticism for its recently introduced feature called "Ledger Recover." This feature allows users to store their encrypted seed phrases with third-party custodians. Some critics argue that this service contradicts Ledger's commitment to security and privacy. However, Ledger's CEO Pascal Gauthier defends the feature, stating that it aligns with the preferences of future customers and is necessary to attract new users to the world of cryptocurrencies. The optional service, priced at $9.99 per month, involves three different companies encrypting and storing seed phrases, requiring at least two of them to be present for wallet access.

## Bitcoin (BTC) $27173 (+0.52%) - Neutral Outlook

![](https://gimg2.gateimg.com/image/article/1684288875Untitled0517 1.png)

![](https://gimg2.gateimg.com/image/article/1684288890Untitled0517 2.png)

**Overview:**

- ***Closest hourly support zone: 27065 - 26990***
- ***Closest hourly resistance zone: 27260 - 27420***
- ***Key Level: 27420 (Hourly Volume Spike)***

<br> **Hourly Resistance zones**

1. 27260 - 27420
2. 27540 - 27670
3. 27790 - 28020

<br> **Hourly Support zones**

1. 27065 - 26990
2. 26895 - 26858
3. 26795 - 26700

## Macro: Concerns Over Debt Ceiling Deal Weigh on US Stocks, China's Economic Recovery Slows

The US stock market faced a downturn as concerns over the debt-ceiling deal and the potential for a historic default weighed on investor sentiment. The Dow Jones Industrial Average experienced a 1% decline, reflecting the growing bearishness among fund managers. A majority of survey participants expressed expectations of a weaker economy, highlighting the need for a resolution to the debt-ceiling impasse.

Meanwhile, negotiations between lawmakers to address the debt ceiling continued, but a significant gap remained between the two sides. House Speaker Kevin McCarthy acknowledged the challenges in finding common ground but remained hopeful that an agreement could still be reached. The uncertainty surrounding the outcome of these negotiations contributed to the market volatility, with each passing day without a resolution raising concerns and trimming demand for US risk assets.

Adding to the market's unease, yields rose across the US curve, with the rate on 30-year notes reaching its highest level since the banking turmoil earlier in the year. This increase was driven in part by Pfizer Inc.'s massive $31 billion debt sale. Despite these financial concerns, US retail sales in April showed resilience, indicating that consumer spending was holding up despite inflationary pressures and high borrowing costs.

Shifting focus to Asia, equity markets displayed mixed performance. Japan's benchmark indexes experienced gains following better-than-expected economic growth. The country's gross domestic product expanded at its fastest pace in three quarters, benefiting from the easing of pandemic regulations. Wall Street strategists pointed to Japan's corporate reforms and loose monetary policy as reasons for further <a href="/pt/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> in the nation's stocks. In contrast, South Korean shares remained muted, and Australian stocks faced a decline as investors eagerly awaited wage data that could shed light on potential tightening measures by the Reserve Bank of Australia.

In terms of global economic outlook, concerns over a worldwide slowdown heightened with sputtering growth in Germany and signs of easing momentum in China. China's economic recovery showed signs of losing momentum as official data for April revealed slower growth in industrial output, retail sales, and fixed investment than expected. The low base of comparison from last year, when Shanghai was under lockdown, partially boosted the data. However, the jump in the unemployment rate for young people to a record high of 20.4% raised concerns about the recovery's ability to absorb new entrants to the labor market.

The disappointing data in China led to calls for more policy stimulus to support economic growth. Economists emphasized the need for targeted measures beyond central bank actions to boost consumer and business confidence. While the People's Bank of China hinted at maintaining a supportive policy stance, some economists predicted stronger actions in the coming months, such as lowering the reserve requirement ratio or cutting interest rates.

<div class="blog-details-info">
<div>Author:** Peter L. **, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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