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Bitcoin (BTC) price rapidly declined with Germany starting BTC sales. It lasted for weeks. Now, the spotlight is on the UK. Recent statements from the world’s sixth-largest economy about the current situation have worried investors. So, what is happening? Why are the markets falling?
Crypto Decline and the UK
The government changed, and the new administration says they inherited “a wreck.” This is not good because it implies bankruptcy beyond political criticism. The world’s sixth-largest economy’s move towards strong tightening, reducing spending, and taking more steps is negative for global liquidity cycle expectations. Therefore, the situation is also negative for cryptocurrencies.
The US debt exceeded $35 trillion for the first time and has been rising sharply since the debt ceiling was lifted. Talks about a third world war are now being discussed at the level of heads of state. The only thing cryptocurrencies need is for states to go bankrupt and a third world war during these quarters when the rise catalysts are so strong.
Did the UK Go Bankrupt?
The Finance Minister and the current administration’s assessments suggest they inherited the government almost bankrupt from the previous administration. These statements were not well received by the markets. If it becomes more severe and pessimistic, markets may interpret this as a sell signal. Of course, BTC quickly fell below $68,000 as it prices in all bad things quickly and good things slowly these days.
The UK Finance Minister Reeves said;
“The total burden on the budget is 35 billion Pounds, with an expected overspending of 22 billion Pounds. If this problem is not resolved, a 25% budget deficit will emerge this year. We will take immediate action to deal with the financial legacy we inherited from the last government.
Next year, we will cut spending projects worth 8 billion Pounds. Inaction is not an option. The financial decisions taken so far will not be enough to close the deficit.”
The world’s sixth-largest economy’s budget-related “bankruptcy, collapse” implications (criticisms of the previous government) coincided with the BTC decline. We will see if this creates a lasting concern.
