Credit rating agencies are watching the ongoing debt ceiling debate in Washington.
Fitch placed the US into a rating watch negative area.
The debt ceiling crisis is creating a good buying opportunity.
Metacade (MCADE), like other cryptocurrencies and stocks, has come under intense pressure as the debt ceiling crisis has escalated. The token was trading at $0.022, which was much lower than its all-time high of $0.046. Other cryptocurrencies have also been in the red. Bitcoin has retreated from the year-to-date high of $31,000 to below $27,000.
Debt ceiling crisis opportunity
Metacade price has not retreated because of its bad fundamentals. Instead, it has dropped because of the ongoing risk-off sentiment among market participants. This is evidenced by the fact that the US dollar index has surged to the highest level in more than a month. The closely watched VIX index has also jumped by double-digits.
The main concern is that the American government will default on its debt obligations in June if Democrats and Republicans fail to reach an agreement. Recent reports show that talks between the two negotiators have hit a wall. As a result, Fitch, a major rating agency announced that it was placing the US in a rating watch negative area. The report said:
“The brinkmanship over the debt ceiling, failure of the U.S. authorities to meaningfully tackle medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden signal downside risks to U.S. creditworthiness.”
I believe that the debt ceiling issue is creating a good opportunity for investors to buy the dip in key financial assets like Metacade and stocks. For one, odds are that the US will not default since the two sides will reach an agreement.
Janet Yellen, the head of the Treasury, has said that the US will run out of money on June 1. This means that there are still six weeks to reach an agreement. Historically, including in 2011, these deals are reached in the last day.
A common saying in the market recommends buying when other people are fearful. This is a strategy that has worked well in the past crises. For example, it worked well when the Covid-19 pandemic was starting. Also, investors who bought the dip during the Global Financial Crisis made strong profits over the years.
Metacade fundamentals are strong
For starters, Metacade is a new…
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