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Fears of a bitcoin correction
Fears of a bitcoin correction

Cryptocurrency

Fears of a Bitcoin correction after Trump’s inauguration are caused by the US debt ceiling.

As the US gets closer to its $36-trillion debt cap, Bitcoin’s price may temporarily drop below $70,000 before it rises again. The debt limit will remain unchanged as of January 21. This could make the world less liquid, which could slow down Bitcoin’s growth. Many experts are still optimistic about Bitcoin’s long-term growth, which will be driven by rising global liquidity and institutional interest.

The US is approaching its $36-trillion debt cap, which could trigger price fluctuations in Bitcoin, potentially leading to a short-term correction. Since new debt will not be issued after President Trump’s inauguration on January 21, experts think that Bitcoin’s value may go down, especially since it hit an all-time high of over $109,000.

Discussion about the US debt ceiling and Bitcoin’s short-term outlook The announcement that debt issuance will cease until March 14 has raised concerns about a shortage of cash in the world’s markets. This could cause Bitcoin’s price to drop temporarily, maybe even below $70,000, before it rises again. Some analysts, like Raoul Pal, have said that Bitcoin’s price tends to go up or down with the amount of money in circulation around the world. Due to less money being available, Bitcoin’s value may go down in the short term. It reached a high point around $110,000 in January before falling.

Different Views on How Bitcoin Reacted Despite these concerns, people continue to hold varying opinions about how the debt cap will impact Bitcoin. Marcin Kazmierczak, a co-founder of Redstone, is among the experts who believe that Bitcoin could serve as a valuable safeguard against the economic instability resulting from the debt limit. Bitcoin hasn’t always moved in sync with traditional markets during debt ceiling problems in the past, but investors may see Bitcoin as a safer bet this time as worries about government debt grow.

Others, including Alvin Kan, the COO of Bitget Wallet, express concern about the potential impact of traditional financial markets’ instability on the cryptocurrency world, which could lead to a decline in Bitcoin’s price. A big part of the effect will rest on how institutional investors respond and how global financial policies change as the economy changes.

What the Long-Term Outlook Is for Bitcoin Many experts are still optimistic about Bitcoin’s long-term prospects. When the problem with the debt ceiling is fixed and world liquidity gets better after March, the market will likely be better for Bitcoin. Jamie Coutts, Chief Crypto Analyst at Real Vision, thinks that Bitcoin’s price could go over $132,000 by the end of 2025. As the world’s money supply grows, the price is likely to rise even more.

Also, VanEck, an asset management company, says Bitcoin could hit as high as $180,000 by the end of 2025, after a possible 30% drop in the first quarter. Bitcoin has a bright future, even though there are some short-term problems. This is because the world money supply is growing and more institutions are adopting Bitcoin.
To sum up, the US debt ceiling crisis may cause some price changes in Bitcoin in the short term, but the general outlook for the cryptocurrency in 2025 is still positive. As global liquidity improves and investor confidence returns, Bitcoin could see big gains, keeping its upward trend going.

author avatar
Alex
Formally freelance blogger Alex is passionate writer with interest in Finance and Business, fascinated about crypto following news and covering stories.
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